Defensive Internationalism by Bobrow Davis B.;Boyer Mark A.;

Author:Bobrow, Davis B.;Boyer, Mark A.;
Language: eng
Format: epub
Publisher: University of Michigan Press

Summarizing the History of Debt Management

In sum, the post-1982 history of debt relief shows an evolutionary pattern of reaction to continuing problems and their recurrence or continuation. While creditors have shown an increasing declaratory willingness to forgo private goods elements, that phenomenon has been more marked for debtors where creditors' had small stakes (the HIPCs). Even in such cases, implementation requirements have remained high, in part because of changing and expanding creditor notions of what effective relief and long-term debt sustainability require.

For middle-income developing countries, the picture is less promising from a public goods perspective. Relief certainly has been forthcoming, but it has come tardily and on terms that place the greatest share of costs on the rescued. Relief has often emphasized the course offering the greatest private and club goods to one or more creditors. The United States has clearly had a veto role on relief but has only intermittently gotten ahead of other bilateral and multilateral creditors in providing it. Other creditors have not taken a consistent position across debtors and time, sometimes resisting and sometimes initiating lines of action that, with all their public goods impurities, involved greater forgiveness and reduction. Those initiatives have been particularly pronounced during periods of U.S. inattention or resistance to internationally provided relief. There has been growing recognition, if not enormous action, on giving debt management and relief a high place on the agenda for collective action and using international coalitions and the IFIs to deal with debt problems. These features do not suggest a decline in impure public goods contributions. They do mute optimism, however, because of demonstrated inadequacy to cope with changes in the international financial system, overcome domestic constraints in creditor and debtor nations, and sufficiently expand IFI mandates and resources.

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