No. 116 - LDCs' repayment problems: a probit analysis

The paper shows how a PROBIT model of the probability of repayment problems for a panel data set of LDCs can be utilized to discriminate among economic factors of external and internal origin. The estimation of the univariate binary PROBIT model for the period 1973-1986 is confronted with multinomial and bivariate extensions in order to better specify the nature of repayment difficulties. Some tentative utilization of the model for policy purposes in the context of the debt strategy is also presented.