Under the HIPC initiatives and MDRI, 36 countries have been provided with more than 117

billion dollars in debt relief since 1997 (IMF/IDA, 2009). This unprecedented amount of relief was

made possible by the convergence of views between a “triple helix” of actors from civil society,

epistemic community and the international debt regime (Callaghy, 2001), who articulated the major

arguments behind the birth of the HIPC initiatives. Among them, arguably the most influential one

has been the assumed existence of a straightforward accounting relationship between debt relief and

pro-poor spending: debt relief is needed because the debt burden prevents HIPCs from investing

in poverty reduction programs. Theoretically, debt relief is expected not only to free-up resources

for poverty reduction (i.e. increase HIPCs “fiscal space” (Heller, 2005)) but also to remove a series

of disincentives to make developmental investments (i.e. remove the “debt overhang” (Krugman,

1988)). Politically, CSOs’ activists have put forward the immoral nature of the mere fact that

poor countries had to use already scarce resources to pay for debt obligations instead of poverty

reductions programmes (Jubilee 2000). Such arguments reached a climax with the MDRI in 2005,

which is explicitly meant to boost HIPCs capacity to meet the MDGs (IMF, 2010).

Yet, the rationale and effectiveness of debt relief as a tool for increasing pro-poor spending remains

controversial. A large amount of cross-country empirical analyses has examined the fiscal response

to debt relief in HIPCs, and often come to the conclusion that no significant evidence was available

that debt relief actually frees-up resources social spending (Arslanap and Henry, 2006; Chauvin and

Kraay, 2005).

Reasons why it should be so, however, remain debated. On the one hand, several authors suggest

that both the amounts and design of HIPC relief were ill-suited to meet their goal (Bird