Robbing the Riches: Capital Flight, Institutions and Debt
Capital flight undermines economic growth and the effectiveness of debt relief and foreign aid, and sometimes drains more resources from poor countries than does debt service. In an analysis of a large panel of developing and emerging market countries using annual data for 1970-2001, we show that both institutions and macro policies robustly affect capital flight. Our study also supports the existence of a revolving door relationship between debt and capital flight. More notably we find countries with weak institutions have a greater propensity to accumulate debt because weak institutions spur capital flight, which, in turn, creates a financing need.
Year of publication: |
2008
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Authors: | Cerra, Valerie ; Rishi, Meenakshi ; Saxena, Sweta |
Published in: |
Journal of Development Studies. - Taylor & Francis Journals, ISSN 0022-0388. - Vol. 44.2008, 8, p. 1190-1213
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Publisher: |
Taylor & Francis Journals |
Saved in:
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