Publication:
The Social Costs of Sovereign Default

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dc.contributor.authorFarah-Yacoub, Juan P.
dc.contributor.authorGraf von Luckner, Clemens
dc.contributor.authorRamalho, Rita
dc.contributor.authorReinhart, Carmen
dc.date.accessioned2022-08-31T18:36:47Z
dc.date.available2022-08-31T18:36:47Z
dc.date.issued2022-08
dc.description.abstractThis paper estimates the costs of sovereign defaults to a broader extent than has been done in the literature. Applying the synthetic control method to a sample of 131 defaults since 1900, it finds that, on average, growth in the first two years falls 3.6 and 2.4 percentage points short of the counterfactual. Still, after a decade, defaulters’ economic output per capita is nearly 17 percent below that of the counterfactual. Poverty headcounts—available since the 1980s—exceed their pre-crisis levels by roughly 30 percent shortly after default and remain elevated a decade later. Variables proxying access to nutrition, energy, and health outcomes—available since the 1960s—suggest that standards of living decline sharply after sovereign defaults. For instance, on average, by year 10 after default, defaulters have 13 percent more infant deaths every year than the synthetic control. And surviving infants are expected to have shorter lives: life expectancy drops to 1.5 percent below the counterfactual.en
dc.identifierhttp://documents.worldbank.org/curated/en/099247208312211235/IDU0bf68e15c0a49f042e208b0c07f4cf3bcdb9e
dc.identifier.doi10.1596/1813-9450-10157
dc.identifier.urihttps://hdl.handle.net/10986/37945
dc.languageEnglish
dc.language.isoen
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Papers;10157
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectSOVEREIGN DEFAULT
dc.subjectSOVEREIGN DEBT
dc.subjectDEBT CRISIS
dc.subjectPOVERTY
dc.subjectECONOMIC GROWTH
dc.subjectSYNTHETIC CONTROL METHOD
dc.subjectHUMAN IMPACT OF DEFAULT
dc.titleThe Social Costs of Sovereign Defaulten
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleThe Social Costs of Sovereign Default
okr.date.disclosure2022-08-31
okr.date.doiregistration2025-04-10T07:18:24.065813Z
okr.date.lastmodified2022-08-31T00:00:00Zen
okr.doctypePolicy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/099247208312211235/IDU0bf68e15c0a49f042e208b0c07f4cf3bcdb9e
okr.guid099247208312211235
okr.identifier.doi10.1596/1813-9450-10157
okr.identifier.externaldocumentumIDU-bf68e15c-a49f-42e2-8b0c-7f4cf3bcdb9e
okr.identifier.internaldocumentum33890938
okr.identifier.reportWPS10157
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/099247208312211235/pdf/IDU0bf68e15c0a49f042e208b0c07f4cf3bcdb9e.pdfen
okr.topicFinance and Financial Sector Development::Financial Crisis Management & Restructuring
okr.topicMacroeconomics and Economic Growth::Development Economics & Aid Effectiveness
okr.topicMacroeconomics and Economic Growth::Economic Growth
okr.topicMacroeconomics and Economic Growth::Economic Insecurity
okr.topicMacroeconomics and Economic Growth::Economic Modeling and Statistics
okr.unitOff of Sr VP Dev Econ/Chief Econ (DECVP)
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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