inform creditor and multilateral organization decisions to extend grants/loans, as in the case of the WB/IMF’s DSA.

_2- Lack of efficiency._ Governments face multiple requests from different external agents. At the same time, external agents duplicate efforts to manage, validate, and disclose their own debt statistics, without any systematic reconciliation process with creditors or cross-source validation.

3- _Noisiness in the market._ Different debt data circulating at the same time may confuse _stakeholders_ not familiar with the process (Seiferling, 2020) _._ It may also increase the burden on DMOs, who are often called upon to clarify their debt statistics.

4- _Challenging data reporting requirements (WB, IMF, 2020)._ Debt statistics in LIDCs are usually produced by DMO staff, not by a specialized statistical office. International guidelines such as PSDS are designed with more sophisticated institutional arrangements in mind, with a clear separation of responsibilities between a DMO and a statistical debt office. This is burdensome for DMO officers, who may lack the adequate statistical skills to report under such guidelines (e.g., nominal versus face value). Furthermore, international statistical definitions may be disconnected from those used by DMO staff in their operations, as in the case of the external debt by residency versus currency.

_5- Pressure on resource-constrained DMOs._ The current disclosure framework often forces short-staffed DMOs to divert resources away from their daily debt management activities to address the multiple and demanding requests of indirect reporting. This is a result of the repercussions of the lack of indirect reporting on lending from WB,<sup>39</sup> IMF,<sup>40</sup> other MDBs, and rating agencies.

6- _Discouragement to invest in accurate direct reporting._ As DMOs engage with external agents to produce debt reports, they may see it as a form of outsourcing their reporting responsibilities. In fact, indirect statistics may reduce DMOs’ incentives to produce direct statistics. This effect may be amplified by the fact that, when discrepancies arise, MDBs’ statistics are usually trusted more than national ones. As an example, a simple exercise was conducted to measure the relevance of direct versus indirect reporting sources. By inspecting The Economist<sup>41</sup> articles from 1998 to 2021 that mention country-specific public debt statistics of 10 LIDCs that disclose their own data,<sup>42</sup> the analysis showed that 93% of the sources reported were indirect. The IMF is most cited (30% of the cases), followed by the World Bank (10%). Direct sources were referred to in only 7% of the articles and included National Statistics Offices, Central Bank Statistics and DMOs. Although the study is limited in scope, it supports the hypothesis that indirect reporting is more commonly relied upon, at least at the international level.

Against these scenarios, this paper calls for: 39 World Bank loans and financing for countries failing to meet basic DRS reporting requirements cannot be presented to the Board unless the country provides an acceptable plan of action for reporting its external debt. 40 The IMF’s Articles of Agreement establish an obligation for every IMF member to provide a minimum set of data to the Fund for its activities, as set forth in Article VIII, Section 5. “In addition, the IMF can request debt information beyond the above-mentioned minimum set of data and can decide not to lend if such critical information is not forthcoming” (WB IMF, 2020). For instance, the IMF interrupted its program in Mozambique in 2017 when cases of “hidden debt” were identified.

> 41 The Economist was selected due to its international coverage and the availability of structured and consistent information on sources of debt statistics. Total observations: 66; data of access: January 26, 2021. 42 Benin, Cameroon, Ethiopia, Ghana, Honduras, Moldova, Mongolia, Nigeria, Pakistan, Zambia.