Bankruptcy Procedures for Sovereigns: A History of Ideas, 1976-2001

45 Pages Posted: 2 Feb 2006  

Kenneth Rogoff

Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

Jeromin Zettelmeyer

European Bank for Reconstruction and Development; CEPR; Peter G. Peterson Institute for International Economics

Date Written: August 2002

Abstract

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.

Keywords: sovereign bankruptcy, debt crises, international bankruptcy court, Chapter 11

JEL Classification: B290, B300, F020, E340

Suggested Citation

Rogoff, Kenneth and Zettelmeyer, Jeromin, Bankruptcy Procedures for Sovereigns: A History of Ideas, 1976-2001 (August 2002). IMF Working Paper No. 02/133. Available at SSRN: https://ssrn.com/abstract=879911

Kenneth S. Rogoff (Contact Author)

Harvard University - Department of Economics ( email )

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Jeromin Zettelmeyer

European Bank for Reconstruction and Development ( email )

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Peter G. Peterson Institute for International Economics ( email )

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