||Abstract Debt relief is a form of development aid that began to gain importance in the last decade of the 20th century. In 1996 the World Bank and the IMF jointly launched the Heavily Indebted Poor Countries (HIPC) initiative, a comprehensive and structured program designed to provide debt relief for eligible low-income countries. The purpose of my thesis is to investigate, whether debt relief for developing countries over the period 1996-2015 affected economic growth in the recipient countries with particular attention being paid to the HIPC countries. I also investigate whether the impact of debt relief on growth varies conditional on institutional quality. I find that the low-income countries on average did not benefit from debt relief. However, I find that debt forgiveness has enhanced the growth rates in the countries in the HIPC initiative. Based on the results of my regression analysis I did not find evidence that the effectivity of debt relief in either group of countries depends on institutional quality.