High debt in poor countries stifles growth, policy reform, and institutions.
High debt in poor countries has negative effects beyond just financial strain. It can hinder economic growth, disrupt policy reforms, and impede institutional development. High debt levels can reduce investment, making it harder for countries to grow. It can also make it difficult for governments to implement effective policies and can strain their ability to manage public resources. Additionally, high debt can weaken donor support and increase administrative burdens for low-income countries.