Horn, SebastianMihalyi, DavidNickol, PhilippSosa-Padilla, César2024-09-182024-09-182024-09-18https://hdl.handle.net/10986/42162How reliable are public debt statistics This paper quantifies the magnitude, characteristics, and timing of hidden debt by tracking ex post data revisions across a comprehensive new database of more than 50 vintages of World Bank debt statistics. In a sample of debt data covering 146 countries and 53 years, the paper establishes three new stylized facts: (i) debt statistics are systematically under-reported; (ii) hidden debt accumulates in boom years and tends to be revealed in bad times, often during IMF programs and sovereign defaults; and (iii) in debt restructurings, higher hidden debt is associated with larger creditor losses. The novel data is used to numerically discipline a quantitative sovereign debt model with hidden debt accumulation and an endogenous monitoring decision that triggers revelations. Model simulations show that hidden debt has adverse effects on default risk, debt-carrying capacity and asset prices and is therefore welfare detrimental.en-USCC BY 3.0 IGOHIDDEN DEBTSOVEREIGN DEBTDEFAULTINTERNATIONAL LENDING AND DEBT PROBLEMSFINANCIAL CRISESWorking PaperWorld Bank10.1596/1813-9450-10907