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

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  • Mr. Jeromin Zettelmeyer
  • Mr. Kenneth Rogoff

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.

Suggested Citation

  • Mr. Jeromin Zettelmeyer & Mr. Kenneth Rogoff, 2002. "Bankruptcy Procedures for Sovereigns: A History of Ideas, 1976-2001," IMF Working Papers 2002/133, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2002/133
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    References listed on IDEAS

    as
    1. Paul R. Krugman, 1988. "Market-Based Debt-Reduction Schemes," NBER Working Papers 2587, National Bureau of Economic Research, Inc.
    2. Krugman, Paul, 1988. "Financing vs. forgiving a debt overhang," Journal of Development Economics, Elsevier, vol. 29(3), pages 253-268, November.
    3. Mr. Steven T Phillips & Mr. Timothy D. Lane, 2000. "Does IMF Financing Result in Moral Hazard?," IMF Working Papers 2000/168, International Monetary Fund.
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    More about this item

    Keywords

    WP; debt crisis; workout mechanism; debt contract; payments moratorium; sovereign bankruptcy; debt crises; international bankruptcy court; Chapter 11; debt-reduction scheme; debtor incentive; bankruptcy court; IMF crisis loan; debt problem; creditor-debtor negotiations; litigation case; debt workout mechanism; IMF article; Debt restructuring; Debt renegotiation; Legal support in revenue administration; Debt rescheduling;
    All these keywords.

    JEL classification:

    • B29 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Other
    • B30 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - General
    • F02 - International Economics - - General - - - International Economic Order and Integration

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