Sovereign debt workouts with the IMF as delegated monitor - a common agency approach
IMF programmes are frequently criticised for lacking focus and being ineffective in helping maintain private credit lines following a debt crisis. A theoretical model is developed to explore the interlinkages between result-based conditionality and creditor collective action problems. The strategic interactions between official and private creditors are highlighted, and some of the trade-offs that underpin the design of IMF programmes are clarified. Conditions under which official creditors are able to limit the efficiency losses generated by creditor non-cooperation and debtor moral hazard are identified. The circumstances under which official lending is able to catalyse private sector finance are also analysed.
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| Date of creation: | May 2003 |
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| Handle: | RePEc:boe:boeewp:187 |
| Contact details of provider: | Postal: Phone: +44 (0)171 601 4030 Fax: +44 (0)171 601 5196 Web page: http://www.bankofengland.co.uk/Email: More information through EDIRC
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