Do the secondary markets believe in life after debt?

Using panel data econometric techniques to examine the case for external debt relief, this report explores the relations between measures of creditworthiness and debt discounts on the secondary markets. It finds, however, that secondary market values tend to reflect past difficulties, not anticipate future ones - so they can't be used to build a case for debt relief. The secondary markets, still in an early evolutionary stage, are quite"thin"and thus unable to exploit efficiently and quickly all available information on creditworthiness.