Structural Vulnerability and Excessive Public Indebtedness in CFA Franc Zone Countries

Sena Kimm Gnangnon ()

No 201237, Working Papers from CERDI

Abstract: This paper relies on the ‘institutional debt rule’ implemented in Franc Zone countries to assess whether the structural vulnerability of these countries matter for their probability to enter into excessive indebtedness. This structural vulnerability is measured by retrospective ‘Economic Vulnerability Index’ (EVI) recently computed jointly by the United Nations and Guillaumont et al., (2011). We observe evidence that the impact of ‘EVI’ is non-linear with respect to the probability of these countries to engage into excessive indebtedness and that, this effect appears to be the same for the two monetary areas belonging to the CFA Franc Zone countries: a rise of EVI induces a higher probability of excessive debt and for higher EVI, this probability declines. Consequently, international development institutions such as the Bretton Woods should take into account such vulnerability in their assessment of the adequate development policies and recommendations to these countries.

Keywords: Structural Vulnerability; Public debt; unconditional logit model; linear probability model (search for similar items in EconPapers)
JEL-codes: C33 C35 E60 H63 O10 (search for similar items in EconPapers)
Pages: 46
Date: 2012
New Economics Papers: this item is included in nep-afr
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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