Linking Social Development with the Capacity to Carry Debt: Towards an MDG-Consistent Debt-Sustainability Concept

18 Pages Posted: 27 Apr 2009

See all articles by Bernhard G. Gunter

Bernhard G. Gunter

Bangladesh Development Research Center (BDRC); American University - Department of Economics

Jesmin Rahman

International Monetary Fund (IMF)

Haiyan Shi

International Monetary Fund (IMF)

Abstract

Owing to concerns among low-income countries that the new debt sustainability framework of the Bretton Woods institutions may lock them into a so-called low debt-low growth scenario, the United Nations has called for a more MDG-consistent debt-sustainability concept. This article shows that there is a robust relationship between achieving the Millennium Development Goals and having a higher capacity to carry debt. It then discusses options for modifying the current debt-sustainability framework, and suggests that including progress made in achieving the MDGs in determining borrowing limits would be a first step towards adopting such a concept.

Suggested Citation

Gunter, Bernhard G. and Rahman, Jesmin and Shi, Haiyan, Linking Social Development with the Capacity to Carry Debt: Towards an MDG-Consistent Debt-Sustainability Concept. Development Policy Review, Vol. 27, No. 3, pp. 269-286, May 2009. Available at SSRN: https://ssrn.com/abstract=1375937 or http://dx.doi.org/10.1111/j.1467-7679.2009.00446.x

Bernhard G. Gunter (Contact Author)

Bangladesh Development Research Center (BDRC) ( email )

2508 Fowler Street
Falls Church, VA 22046-2012
United States

American University - Department of Economics ( email )

4400 Massachusetts Avenue, N.W.
Washington, DC 20016-8029
United States

HOME PAGE: http://www.american.edu/cas/faculty/gunter.cfm

Jesmin Rahman

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Haiyan Shi

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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