Essays on external debt issues in developing countries: a post-Keynesian perspective

This dissertation investigates external debt dynamics in developing countries from a post‑Keynesian perspective, emphasizing how external constraints limit growth and human development. The first chapter analyzes the renewed rise of external debt in Sub‑Saharan Africa, showing that despite past relief initiatives, the region faces unsustainable debt trajectories. Declining concessionality, increasing reliance on private creditors, and shrinking fiscal space intensify the trade‑off between debt servicing and essential development spending. By extending the Geometry of Debt Sustainability model to include human development expenditures, the chapter demonstrates how higher imports of health and education goods further worsen debt sustainability. The second chapter surveys neo‑Kaleckian open‑economy models that incorporate foreign debt, highlighting how interest rates, exchange‑rate movements, capital account liberalization, and distributive conflict shape macroeconomic instability. Post‑Keynesian theory emerges as a more suitable framework for understanding structural external constraints. The third chapter develops a stock‑flow consistent post‑Keynesian growth model in a closed economy, analyzing equilibrium conditions and stability through analytical methods and simulations, and establishing the basis for an open‑economy extension. The final chapter embeds the model in an open‑economy setting with trade, capital flows, and foreign‑currency debt. It shows how balance‑sheet effects, risk premia, and capital‑flow volatility can trigger balance‑of‑payments crises and explosive debt dynamics, offering a theoretical lens to interpret the current debt distress in Sub‑Saharan Africa. Overall, the dissertation argues for integrating external constraints, financial dynamics, and human development needs into debt sustainability assessments, and supports demand‑oriented macroeconomic policies alongside reforms to the international financial architecture.