Prasad, AbhaPollock, MalvinaLi, Ying2013-04-112013-04-112013-02https://hdl.handle.net/10986/13165This paper analyzes the status of public debt management performance in 17 small states through the findings of the Debt Management Performance Assessment reports. Empirical evidence indicates that the higher the quality of a country's policies and institutions, the better is its capacity to carry debt and withstand exogenous shocks. Borrowing for productive purposes can be an important element in boosting growth of gross domestic product but, conversely, excessive borrowing or poorly structured debt in terms of maturity, currency, or interest rate composition can quickly offset the positive impact, deter new foreign and domestic investment, compromise reform programs, depress growth of gross domestic product, exacerbate the challenge of meeting debt service obligations, and may induce or propagate economic crises. Arguments in favor of sound debt management are especially compelling for small states that must mitigate the particular risks to which their economies are exposed. Against this backdrop, the paper identifies aspects of debt management where small states do relatively well and those where they perform poorly, relative to other developing countries, and examines the underlying factors at play. It elaborates on some of the successful measures taken by small states to enhance debt management performance and considers how these may be applied more broadly in other small states. The paper offers a number of practical suggestions to strengthen debt management performance.en-USCC BY 3.0 IGOACCOUNTINGACCOUNTING STANDARDSACTIVE DEBTAGGREGATE DEBTASPECTS OF DEBT MANAGEMENTASSET PRICEAUCTIONAUCTIONSBALANCE SHEETBANK FINANCINGBENCHMARK BONDSBENEFICIARIESBIDBONDBOND MARKETSBORROWING COSTSBORROWING PLANBORROWING PLANSBROKERBROKERSBUYBACKCAPACITY CONSTRAINTSCAPITAL ADEQUACYCAPITAL FLOWSCAPITAL INVESTMENTCAPITAL MARKETCASH BALANCECASH FLOWCASH FLOWSCENTRAL BANKCENTRAL BANKSCENTRAL GOVERNMENT DEBTCOMMERCIAL BANKSCOMMODITY PRICESCONTINGENT LIABILITIESCOUPONSCREDITWORTHINESSCURRENCYCURRENCY RISKSCURRENT ACCOUNTCURRENT ACCOUNT DEFICITSDEBT ACCUMULATIONDEBT BURDENSDEBT COMPOSITIONDEBT CRISESDEBT DATADEBT DYNAMICSDEBT FORGIVENESSDEBT ISSUESDEBT LEVELSDEBT MANAGEMENT CAPACITYDEBT MANAGEMENT POLICIESDEBT MANAGEMENT PRACTICESDEBT MANAGERSDEBT MARKETDEBT OBLIGATIONSDEBT PORTFOLIOSDEBT PROBLEMDEBT PROBLEMSDEBT RATIOSDEBT RELIEFDEBT REPORTSDEBT RESTRUCTURINGDEBT SERVICEDEBT SERVICE OBLIGATIONSDEBT SERVICE PAYMENTSDEBT TRANSACTIONSDEBT-SERVICEDEBTORDEBTOR REPORTING SYSTEMDEVELOPING COUNTRIESDOMESTIC BORROWINGDOMESTIC BORROWINGSDOMESTIC DEBTDOMESTIC DEBT MARKETSDOMESTIC MARKETDOMESTIC MARKETSDOMESTIC SECURITYENABLING ENVIRONMENTENFORCEMENT MECHANISMSEXCESS LIQUIDITYEXCESSIVE BORROWINGEXPENDITURESEXTERNAL BORROWINGEXTERNAL DEBTEXTERNAL DEBT INDICATORSEXTERNAL FINANCINGEXTERNAL INDEBTEDNESSEXTERNAL PUBLIC DEBTFINANCIAL CRISISFINANCIAL INSTABILITYFINANCIAL INSTITUTIONSFINANCIAL MARKETFISCAL DEFICITSFISCAL POLICIESFISCAL POLICYFIXED EXCHANGE RATEFIXED INCOMEFIXED INCOME SECURITIESFOREIGN CURRENCYFOREIGN INVESTMENTFOREIGN MARKETSFUNGIBLEGLOBAL ECONOMYGOVERNMENT FINANCINGGOVERNMENT SECURITIESGOVERNMENT SECURITYGROSS DOMESTIC PRODUCTHOLDINGHUMAN RESOURCEINCOME LEVELINCOME LEVELSINCOME VOLATILITYINDEBTEDNESSINFLATIONINFORMATION TECHNOLOGYINSTITUTIONAL ARRANGEMENTS FOR DEBT MANAGEMENTINSTITUTIONAL CAPACITYINSTITUTIONAL INVESTORSINSTRUMENTINSURANCEINSURANCE COMPANIESINTEREST RATEINTEREST RATE SWAPSINTERNATIONAL BANKINTERNATIONAL DEBTINVESTMENT PROJECTSINVESTOR BASEINVESTOR DEMANDISSUANCELEGAL FRAMEWORKLEGAL FRAMEWORKSLEGAL SYSTEMLEVEL PLAYING FIELDLIQUID BENCHMARKLIQUID DOMESTIC DEBT MARKETSLOANLOAN CONTRACTLOAN GUARANTEESLOCAL CURRENCIESLOCAL CURRENCYLOCAL SECURITIESLONG-TERM INVESTORSLONG-TERM LIABILITIESMACROECONOMIC MANAGEMENTMACROECONOMIC POLICIESMARKET DATAMARKET DEPTHMARKET DEVELOPMENTMARKET DISCIPLINEMARKET MAKERSMARKET PARTICIPANTSMATURITIESMATURITYMEASUREMENT OF DEBTMONETARY FUNDMONETARY POLICIESMONETARY POLICYNATIONAL DEBTNATIONAL DEBT MANAGEMENTNATURAL DISASTERNATURAL DISASTERSNET PRESENT VALUE OF DEBTOPEN ECONOMIESOUTSTANDING DEBTPENSIONPENSION FUNDPENSION FUNDSPOLITICAL STABILITYPORTFOLIOPORTFOLIO RISKPORTFOLIOSPOTENTIAL INVESTORSPRIMARY MARKETPRIVATE CREDITORSPUBLIC BORROWINGPUBLIC DEBTPUBLIC DEBT MANAGEMENTPUBLIC FINANCEPUBLIC FINANCESPUBLIC SECTOR DEBTPUBLIC SECTOR DEFICITSPURCHASING POWERQUALITY OF DEBT MANAGEMENTREGISTRY SYSTEMREGULATORY FRAMEWORKREGULATORY INFRASTRUCTUREREMITTANCERESERVERESERVESRETAIL INVESTORSRISK FACTORSRISK MANAGEMENTSECONDARY MARKETSECONDARY MARKETSSECONDARY TRADINGSECURITIES EXCHANGESECURITY MARKETSETTLEMENTSETTLEMENT SYSTEMSETTLEMENT SYSTEMSSOVEREIGN DEBTSUBSTANTIAL DEBTT-BONDSTAXTOTAL DEBTTRADINGTRANSACTIONTRANSACTION COSTSTRANSPARENCYTREASURYTREASURY BILLSTREASURY BONDSTREASURY NOTESTURNOVERUNIFORM PRICEUNIFORM PRICE AUCTIONUSE OF DERIVATIVESYIELD CURVEZERO COUPONWorld Bank10.1596/1813-9450-6356