**Table 2:** Summary statistics of debt data revisions

||N|Mean|Median|Std. Dev.|p-value|
|---|---|---|---|---|---|
|_As a percentage of GDP_||||||
|Debt stock (DOD)|5,702|1.06|0.09|5.76|0.000|
|Commitments (COM)|5,695|0.70|0.08|4.17|0.000|
|_In million USD_||||||
|Debt stock (DOD)|5,702|159.22|5.00|1,909.90|0.000|
|Commitments (COM)|5,695|148.60|6.00|1,169.82|0.000|

_Notes:_ The table reports summary statistics and p-values for data revisions to debt stocks and debt commitments as defined in equation (1), both in percent of GDP and in millions of nominal USD. GDP data is taken from World Bank (2022) and not subject to revisions. P- values are obtained from testing the null hypothesis that revisions have a mean of zero. We use Newey-West heteroskedasticity- and autocorrelation-consistent standard errors (Newey and West, 1987).

Two results stand out. First, Figure 5 reveals the large degree of uncertainty around the true level of indebtedness of developing and emerging market countries. Debt data revisions exhibit large dispersion, with frequent upward and downward revisions.<sup>19</sup> Approximately 70 percent of all debt stock statistics and 50 percent of all debt flow statistics published through the World Bank International Debt Statistics are revised at least once after their initial publication. This result is also reflected by the large standard deviation of 5.76 percent of GDP for stock revisions and 4.17 percent of GDP for flow revisions.

Second, the figure shows that debt data is systematically under-reported. If data revisions were the result of a well-behaved statistical process, one akin to noise or accidental misreporting, then we would expect the mean of the distribution to not be significantly different from zero (Aruoba, 2008). Figure 5 reveals that this is not the case. The distribution of both debt stock and debt flow revisions are heavily skewed to the right. While the median debt stock revision is close to zero, the average revision is positive and large at approximately 1 percent of GDP. Likewise, yearly undisclosed new borrowing has a mean of 0.7 percent of GDP. Table 2 combines the mean and median debt revisions with the standard deviation and shows that the mean revision as a percentage of GDP is positive and statistically different from zero at the 1% significance level. This result is incompatible with the notion of a purely noisy revision process and indicates systematic under-reporting of initial debt stocks and flows.<sup>20</sup> In Appendix Table C4 we show that this result is not driven by a specific subgroup but holds across all decades and almost all creditor types, debtor regions and income groups.

> 19For the flow measures, ex post upward revisions are four times as likely as downward revisions. For stock revisions, the same metric is not as insightful, since a single flow revision (e.g. a missing borrowing) may lead to persistent debt stock revisions until loans are repaid. Downward revisions can be caused by outright measurement error (e.g. typos) or by under-reporting of repayment flows (see Appendix Section C.3).

> 20Another way of assessing the magnitude of hidden debt and borrowing is to measure how much borrowing remained undisclosed in the initial reporting and was revealed only in subsequent vintages. Our data shows that 12.6 percent of all lending is only revealed retrospectively. Over the entire history of the World Bank’s debt report publications, USD 1 trillion in loans was initially unreported and revealed only in subsequent vintages.

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