Bankruptcy Procedures for Sovereigns: A History of Ideas, 1976-2001
Harvard University - Department of Economics; National Bureau of Economic Research (NBER)
European Bank for Reconstruction and Development; CEPR; Peter G. Peterson Institute for International Economics
IMF Working Paper No. 02/133
This paper describes the evolution of ideas to apply bankruptcy reorganization principles to sovereign debt crises. Our focus is on policy proposals between the late 1970s and Anne Krueger`s (2001) proposed Sovereign Debt-Restructuring Mechanism, with brief reference to the economics literature on sovereign debt. We describe the perceived inefficiencies that motivate proposals, and how proposals seek to change debtor and creditor incentives. We find that there has been a moving concensus on what constitutes the underlying problem, but not on how to fix it. The range of proposed approaches remains broad and only recently shows some signs of narrowing.
Number of Pages in PDF File: 45
Keywords: sovereign bankruptcy, debt crises, international bankruptcy court, Chapter 11
JEL Classification: B290, B300, F020, E340
Date posted: February 2, 2006
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