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The Political Economy of Bilateral Lending from Emerging Creditors

  • Pippa Morgan EMAIL logo
Published/Copyright: September 15, 2022
Journal of Globalization and Development
From the journal Journal of Globalization and Development Volume 13 Issue 2

Abstract

A paucity of data has thus far made systematic comparative analysis of emerging bilateral creditors a major challenge. In this study I take advantage of new World Bank data on the sovereign creditors of low- and middle-income countries to map the distribution of lending from the key emerging bilateral official creditors during the 21st century, focusing on the BRICs (Brazil, Russia, India, and China). I then statistically analyze the political and economic factors that drive BRICs’ lending and investigate whether their motivations and terms are different from each other and from “traditional” creditors. The results suggest that concerns about the BRICs using bilateral credit as a foreign policy tool may be overblown. Instead, BRICs official loan commitments are driven by their trading ties with borrowers, and are complements to rather than substitutes for traditional lenders. However, the results also show that countries which borrow proportionately more from the BRICs face significantly less concessional terms on their official external debts compared to borrowing from traditional OECD lenders. Given the growing importance of emerging bilateral creditors, systematic comparative understanding of their motives and behavior has substantial policy relevance, in particular amid COVID-19 induced economic distress across much of the developing world.

Keywords: emerging creditors; official finance; China, Russia, India, Brazil; debt
Corresponding author: Pippa Morgan, Division of Social Science, Duke Kunshan University, Kunshan, P.R. China, E-mail:

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Supplementary Material

The online version of this article offers supplementary material (https://doi.org/10.1515/jgd-2021-0049).

Received: 2021-06-29
Accepted: 2022-03-04
Published Online: 2022-09-15

© 2022 Walter de Gruyter GmbH, Berlin/Boston

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https://doi.org/10.1515/jgd-2021-0049
Keywords for this article
emerging creditors; official finance; China, Russia, India, Brazil; debt

Articles in the same Issue

  1. Frontmatter
  2. Symposia_Articles
  3. Towards HIPC 2.0? Lessons from Past Debt Relief Initiatives for Addressing Current Debt Problems
  4. A Mountain of Debt: Navigating the Legacy of the Pandemic
  5. Policy Analysis
  6. Debt Dynamics in Emerging and Developing Economies: Is R − G a Red Herring?
  7. Symposia_Article
  8. The Political Economy of Bilateral Lending from Emerging Creditors
  9. Research Foundation
  10. The Odious Haitian Independence Debt
  11. Policy Analysis
  12. On the Potential of Sovereign State-Contingent Debt in Contributing to Better Public Debt Management and Enhancing Sustainability Outcomes
  13. Symposia_Article
  14. Overcoming Original Sin
  15. Symposium
  16. Sovereign Debt Restructuring: The Way Forward
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