The Politics of Third World Debt

1990 ◽  
Vol 23 (3) ◽  
pp. 411 ◽  
Author(s):  
Howard J. Wiarda
Keyword(s):  
Third World ◽  
Third World Debt

British economy & Third World debt

1993 ◽  
Vol 20 (57) ◽  
pp. 116-117
Author(s):  
Helen O'Connell
Keyword(s):  
Third World ◽  
British Economy ◽  
Third World Debt

scholarly journals Cleaning up Third World Debt Without Getting Taken to the Cleaners

1990 ◽  
Vol 4 (1) ◽  
pp. 31-42 ◽  
Author(s):  
Jeremy Bulow ◽  
Kenneth Rogoff
Keyword(s):  
Third World ◽  
Debt Crisis ◽  
Population Control ◽  
Development Aid ◽  
Bank Debt ◽  
International Debt ◽  
Regulatory Changes ◽  
Loan Guarantees ◽  
Third World Debt ◽  
Made In

Should taxpayers of wealthy countries finance a leveraged buyout of third world debt? The case for establishing an international debt discount facility rests on the belief that the overhang of foreign commercial bank debt is stifling growth in the Highly Indebted Countries, and that coordination problems among private sector banks are blocking efficiency-enhancing debt reduction schemes. Thus there is scope for a multilateral government agency to step in, buy up the debts, and pass on the efficiency gains to struggling debtors. Our contention is that a debt discount facility would in fact be a black hole for aid funds, and would yield only minimal efficiency benefits. Our assessment of the debt crisis suggests a very different approach. Development aid should be divorced from debt negotiations and instead should be tied to countries' performance in areas such as environmental policy, drug interdiction, and population control. Future aid allocations should not be disguised as loan guarantees, and the massive bond obligations of existing multilateral lenders ought to be placed on the books. Finally, we recommend reversing a number of legal and regulatory changes made in the 1970s that served to encourage the loans in the first place.

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