Under what conditions should grants be preferred to loans? To answer this question, we present a simple model à la Krugman (1988) and show that, for any given level of development assistance, higher concessionality is good for growth if countries are poor, have bad policies, and have high debt...

In this paper, we examine how country insurance schemes affect policymakers' incentives to undertake reforms. Such schemes (especially when made contingent on negative external shocks) are more likely to foster than to delay reform in crisis-prone volatile economies. The consequences of country...

In this paper, we examine how country insurance schemes affect policymakers' incentives to undertake reforms. Such schemes (especially when made contingent on negative external shocks) are more likely to foster than to delay reform in crisis-prone volatile economies. The consequences of country...

Do highly indebted countries suffer from a debt overhang? Can debt relief foster their growth rates? To answer these important questions, this article looks at how the debt-growth relation varies with indebtedness levels, as well as with the quality of policies and institutions, in a panel of...

When donors and recipients have different preferences over budgetary allocations, conditionality helps the implementation of donor-financed poverty reduction programs. If donors cannot perfectly monitor all recipients' actions, however, conditionality entails an inefficient allocation of...

We study how public disclosure of banks' risk exposure affects banks' risk taking incentives and assess the impact of the presence of informed depositors on the soundness of the banking system. We find that, when banks have complete control over the volatility of their loan portfolio, public...