Was the Highly Indebted Poor Country Initiative (HIPC) a Success?

Abstract

Historically, the sustainability of long-term debts has been a primary concern for both indebted countries and those who finance their debts. In the late 1990s the Bretton Wood’s institutions (the International Monetary Fund, IMF, and the World Bank) launched the Highly Indebted Poor Countries initiatives (HIPC I, 1996 and HIPC II, 1999) to reduce the burden of debt on highly indebted countries. If countries could meet certain complex criteria, the HIPC would stop the rescheduling of their debts. This article analyzes the effectiveness of the HIPC initiative and finds that its successes remain questionable.