After a massive international campaign calling attention to the development impact of foreign debt, the Heavily Indebted Poor Countries (HIPC) initiative is now underway. But will the HIPC Initiative meet its high expectations? Will debt relief substantially raise growth? How do we make sure that debt relief benefits poor people? And how can we ensure that poor countries do not become highly indebted again? These are some of the key policy issues covered in this rigorous and independent analysis of debt, development, and poverty. Contents PART I: EVALUATING DEBT RELIEF Introduction; T.Addison, H.Hansen & F.Tarp Debt Dynamics and Contingency Financing: Theoretical Reappraisal of the HIPC Initiative; M.Nissanke & B.Ferrarini Policy Selectivity Forgone: Debt and Donor Behaviour in Africa; N.Birdsall, S.Claessens & I.Diwan HIPC Debt Relief and Policy Reform Incentives; J-C.Berthélemy Resolving the HIPC Problem: Is Good Policy Enough? T.Addison & A.Rahman PART II: GROWTH EFFECTS OF DEBT RELIEF External Debt and Growth: Implications for HIPC Countries; C.Pattillo, H.Poirson & L.A.Ricci The Impact of External Aid and External Debt on Growth and Investment; H.Hansen External Debt, Growth and the HIPC Initiative: Is the Country Choice Too Narrow?; A.R.Chowdhury Debt Relief and Growth: A Study of Zambia and Tanzania; A.Bigsten, J.Levin & H.Persson PART III: POVERTY EFFECTS OF DEBT RELIEF Public Spending and Poverty in Mozambique; R.Heltberg, K.Simler & F.Tarp Debt Relief, Demand for Education, and Poverty; E.Dabla-Norris, J.M.Matovu & P.Wade Making Debt Relief Conditionality Pro-Poor; O.Morrissey