Fiscal Vulnerabilities in Low-Income Countries: Evolution, Drivers, and Policies

The world’s 26 poorest economies—home to about 40 percent of all people who live on less than $2.15 a day—are deeper in debt than at any time since 2006 and increasingly vulnerable to natural disasters and other shocks. Yet international aid as a share of their GDP has dwindled to a two-decade low, starving many of much-needed affordable financing.

This study constitutes the first systematic assessment of the causes of chronic fiscal weakness in the very poorest economies—those with annual ...