information about the underlying loans and bonds portfolio.<sup>18</sup> These properties of the World Bank’s debt statistics ensure that ex post upward revisions are associated with the debtor country reporting additional, previously unreported loans to the World Bank retrospectively. As the reporting guidelines are stable over time, any previously unreported loan should have been reported in the previous vintage and thus constitutes a violation of World Bank reporting guidelines. Our measure of hidden debt can therefore be summarized as initially under-reported debt in violation of prevailing reporting standards that is only revealed ex post.

Not all instances of hidden debt in our database are related to the deliberate hiding of liabilities. While such cases exist (see the case study on Mozambique in section 2 and the list of IMF reporting violations in appendix B.6), ex-post upward revisions can also be caused by a lack of statistical capacity in the reporting country. A debtor might for example lack the means to compile comprehensive debt statistics of its state-owned enterprises. As its capacity increases over time, new debtor entities are incorporated into the debt statistics and additional liabilities are identified and reported. Some of the upward revisions may be the results of accidental misreporting by the authorities, for example through typos when entering numerical values. But in such instances, we would expect cases of over-reporting and under-reporting to cancel each other out statistically.

**Distinction from contingent liability realizations:** The debt data revisions that we document are _not_ driven by contingent liability realizations, i.e., the government’s assumption of private sector liabilities. In contrast to hidden debt as defined here, contingent liability realizations do not require ex post revisions to previously published debt data; rather, they only lead to increases in subsequent annual public debt burden indicators (see Appendix Section B.3 for a detailed discussion and an empirical analysis of this proposition). Nevertheless, contingent liability realizations share several of the properties of hidden debt revelations that we document in this paper. The government’s assumption of private sector liabilities, most notably in the form of bailouts of domestic banks, tends to occur during times of distress and can lead to unanticipated jumps in the government’s debt burden (Diaz-Alejandro, 1983; Campos et al., 2006; Reinhart and Rogoff, 2011b; Bova et al., 2016; Hur et al., 2024). In this sense, our measure of under-reporting is a lower bound for the overall magnitude of “debt revelations” that bond investors endure in financial crises.

**Validation and robustness:** In Appendix Section B, we conduct several robustness and validation exercises to rule out the possibility that the debt data revisions that we observe are driven by alternative mechanisms. In particular, we verify that our revision patterns are not driven by changes in reporting rules (Section B.1), ex post revisions to exchange rates (Section B.2), contingent liability realizations (Section B.3), the reclassification of liabilities (Section C.1), by mere reporting lags (Section B.4) or revisions of dated debt figures (Section

> 18This stands in contrast with real GDP growth and other macro variables that are also subject to frequent revisions (see, e.g., Aruoba, 2008; Johnson et al., 2013; Goes, 2024). Since these variables need to be estimated or can be revised in response to methodological refinements or updated assumptions, the nature of revisions in these variables is different from that of revisions in debt data reporting that we document here.

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