Our domestic public debt data set comprises 40 low and lower-middle-income countries over the period 1971-2011 (see Table A1 in the Appendix).<sup>11</sup> Following the GFSM (IMF, 2001), we adopt the residency basis to define domestic debt in 35 countries, whereas the currency basis is used in five countries because of their debt recording practices and data constraints. We include all domestic financial liabilities defined by the GFSM (IMF, 2001), with the exception of arrears, and focus on the Central Government debt as most other studies in the literature.<sup>12</sup> As a novelty, our dataset contains information on the level and structure of domestic public debt: along with the stock of domestic public debt, we gather data on on-budget interest payments, type of instruments, maturity, and investor base.<sup>13</sup> Among the 40 countries, 33 are classified as LICs and seven as lower-middle income countries. There are 38 countries benefiting from IDA lending (denoted IDA-only countries) and two receiving a mix of IDA and IBRD lending (denoted blend countries). HIPCs are two-thirds of the sampled countries. In terms of geographic location, 29 countries are in Sub-Sahara Africa, five in East Asia and Pacific, two in Europe and Central Asia, two in South Asia, one in Latin America and the Caribbean, and one in Middle East and North Africa.

As expected when dealing with LICs, the data availability is quite heterogeneous across countries and over time. In our data set, accurate information on debt stock exists for 40 countries whereas data on debt structure is reported for 36 countries. In addition, the time span of variables included in the dataset largely differs across countries. We are therefore constrained to selectively choose panels of data to conduct meaningful descriptive analyses and comparisons in Section 4. Thus, we construct two balanced panels covering the period 1996-2011: the _Debt Stock Sample_ contains the domestic debt stock series for 21 countries, and the _Debt Structure Sample_ includes data on debt stock and structure for 15 countries. We also construct a balanced panel covering the period 2007-2011 for the whole sample of 36 countries, the _Debt Structure Short Sample_ .

In the next section, we illustrate the evolution of domestic public debt in LICs using the _Debt Stock Sample_ and we analyze the debt structure and financing terms - including on-budget interest payments, type of instruments, maturity, and investor base – using the _Debt Structure Sample_ and the _Debt Structure Short Sample_ . Reported time series are primarily weighted coun-

> ment. A security is designed to be traded on an organized exchange, although actual trading in secondary markets may not happen.

> 10 The treatment of government (financial, liquid) assets that leads to the definition of gross versus net debt is becoming an important issue in EMs. However, just a few LICs provide data on net debt and stocks of financial liquid assets that could potentially be used to repay maturing debt.

> 11 Lower-middle-income countries included in our database slightly exceed the per-capita GNI threshold separating their income category from the low-income countries.

> 12 Reporting of arrears varies largely across countries, e.g., the timing of recording could be as soon as payments are delayed, or when arrears are audited, or when they are settled or securitized. Information on debt owed by subnational governments and state-owned enterprises is available for only 7 countries in a few recent years, thus preventing us from constructing a Public Sector debt dataset.

> 13 Our data sources concerning domestic public debt include IMF Staff Reports, websites of countries’ Ministry of Finance and Central Bank, and consultations with World Bank country economists, IMF country desks, and debt managers members of a network established by the World Bank’s Economic Policy, Debt, and Trade Department. Data on external public debt are drawn from the World Bank’s Debt Reporting System (DRS).

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