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The short and long run effects of debt reduction - Evidence from debt relief under the enhanced HIPC and MDR initiatives

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– The authors apply a time-shifted difference-in-differences strategy to evaluate the effects of this intervention. The date of each country’s decision to participate in the program is used as one treatment point while the date of the completion of the debt relief program is used as another treatment point. The exercise compares different economic outcomes such as domestic and foreign investment, schooling, and employment of the treated observations to the counterfactual of untreated country-years. The period between the decision and completion points is a short run while the period after the completion point is considered a long run. | The short and long run effects of debt reduction - Evidence from debt relief under the enhanced HIPC and MDR initiatives