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How much debt must be cancelled?

Author

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  • Joseph Hanlon

    (Development Policy and Practice, The Open University, Milton Keynes, UK)

Abstract

Developing country debt now exceeds $2.4 trillion and has become a major international political and economic issue for debtor governments, creditor governments, the IMF and World Bank, and campaigning organizations such as Jubilee 2000. For the poorest countries, debt has become unpayable and debt service an obstacle to development. This paper argues that debt crises and substantial debt cancellation are part of the normal economic cycle, and that an unusual aspect of this cycle has been the unwillingness to cancel debt. Recent historic precedent suggest that at least $1 trillion in debt would need to be cancelled. The paper then uses a 'rights-based approach to development' to estimate that more than $600 billion in debt must be cancelled to release sufficient funds to meet internationally agreed development targets and thus satisfy human rights. Finally, the paper argues that lenders must take responsibility for illegitimate, corrupt and odious loans. Debt cancellation is the norm, not the exception, and the only question is how much. Copyright © 2000 John Wiley & Sons, Ltd.

Suggested Citation

  • Joseph Hanlon, 2000. "How much debt must be cancelled?," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(6), pages 877-901.
    • Handle: RePEc:wly:jintdv:v:12:y:2000:i:6:p:877-901
    DOI: 10.1002/1099-1328(200008)12:6<877::AID-JID720>3.0.CO;2-9
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    References listed on IDEAS

    as
    1. World Bank, 2000. "World Development Indicators 2000," World Bank Publications - Books, The World Bank Group, number 13828, December.
    2. Huw Evans, 1999. "Debt Relief for the Poorest Countries: Why Did It Take So Long?," Development Policy Review, Overseas Development Institute, vol. 17(3), pages 267-279, September.
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    Cited by:

    1. Gasper, D.R., 2007. "Problem- and policy-analysis for human development," ISS Working Papers - General Series 18743, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    2. Gasper, D.R., 2007. "Values, vision, proposals and networks: using ideas in leadership for human development," ISS Working Papers - General Series 18758, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    3. Helen Yanacopulos, 2004. "The public face of debt," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(5), pages 717-727.
    4. World Bank, 2004. "Stabilization and Fiscal Empowerment : The Twin Challenges Facing India's States, Volume 2. Detailed Report," World Bank Publications - Reports 16775, The World Bank Group.
    5. Samuel Perlo‐Freeman & Don J. Webber, 2009. "Basic Needs, Government Debt and Economic Growth," The World Economy, Wiley Blackwell, vol. 32(6), pages 965-994, June.
    6. Neumayer, Eric, 2002. "Is Good Governance Rewarded? A Cross-national Analysis of Debt Forgiveness," World Development, Elsevier, vol. 30(6), pages 913-930, June.
    7. Beja, Jr., Edsel, 2009. "The Philippines on debt row," MPRA Paper 16553, University Library of Munich, Germany.

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