DYNAMIQUE ECONOMIQUE DE L’ENDETTEMENT PUBLIC EXTERIEUR

Abstract

The text presents a review of theoretical and empirical literature on the relationship between external public debt and economic growth. Theoretically, classical and neoclassical approaches warn against the negative effects of external debt, considering that it hampers savings and investment. Avramovic proposes a cyclical view in which debt initially stimulates growth but becomes unsustainable in the long term. Keynesian theory, on the other hand, sees public debt as a tool to boost demand. The debt-overhang theory highlights a threshold beyond which debt hinders growth, while acknowledging that a moderate level of debt can have a positive effect. Recent empirical studies offer varied results depending on country contexts and time periods. For instance, studies in Morocco and Côte d'Ivoire show moderate positive effects of debt, while analyses in Ethiopia and Central Africa reveal a negative effect beyond a certain threshold. Other studies identify optimal debt thresholds for maximizing growth, emphasizing the need for prudent management of external debt to avoid recessive impacts.