Work detail

Relation of Debt Relief to Social and Military Expenditures: Empirical Evidence

Author: Bc. Jan Nykl
Year: 2021 - summer
Leaders: PhDr. Jaromír Baxa Ph.D.
Work type: Bachelors
Language: English
Pages: 91
Awards and prizes:
Abstract: This work focuses on the relationship between sovereign debt relief on one side
and government expenditure on healthcare, education, and armed forces on the
other side. Each effect is estimated separately using two dynamic panel data
methods: Arellano-Bond Difference GMM and Arellano-Bover/Blundell-Bond
System GMM.
I use three subsets of a dataframe that contains 114 recipients of post-1991 debt
relief. The health spending analysis was performed on 110 countries observed in
the period of 1995 to 2017; the education expenditure equation was estimated
using data on 104 countries from the period 1991 to 2018; and the military
spending subset contains data on 103 countries also observed between 1991 and
I found a statistically significant negative effect of debt relief on military expenditure and a significant positive effect of debt relief on education spending. The
latter was, however, sensitive to the choice of estimation method. The effect on
health expenditure is unclear.


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