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An Assessment of the Brady Plan Agreements

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  • Jean-Claude Berthélemy
  • Robert Lensink

Abstract

This paper presents an assessment of the results of Brady plans for debtor countries which have implemented such agreements (Costa Rica, Mexico, the Philippines, Uruguay and Venezuela). First, we show that the relatively successful Mexican case cannot be generalized, due to the great diversity of the agreements signed. Hence a case-by-case analysis is essential. Second, we attempt to measure the distribution of wealth gains and losses among Brady plan participants. An original feature of this attempt is that we explicitly take account of the role of multilateral creditors in the burden sharing. In a simplified framework, Brady plans are interpreted as a "gift" from official creditors, which is, with one exception, fairly equally shared between banks and debtors. On completion of this analysis, the assessment is modified on a case-by-case basis in order to take account of efficiency gains specifically linked to the Brady deals. This does not lead to very optimistic conclusions about ... Ce document présente une évaluation des plans Brady du point de vue des cinq pays débiteurs qui ont jusqu'à présent mis en oeuvre de tels accord (Costa Rica, Mexique, Philippines, Uruguay, Venezuela). Dans un premier temps, on montre que le relatif succès du plan Brady mexicain n'est pas nécessairement généralisable, tant la diversité des accords signés est grande. Une évaluation au cas par cas est par conséquent nécessaire. Dans un second temps, on tente de mesurer les effets des plans Brady en termes de répartition des gains et pertes de richesse entre les parties prenantes. Cette tentative présente l'originalité de tenir compte explicitement du rôle des créanciers multilatéraux dans le partage du fardeau. En première analyse, les plans Brady sont ici interprétés comme un "cadeau" des créanciers officiels, partagé à une exception près à parts sensiblement égales entre les banques et les débiteurs. Si l'on complète l'analyse pour tenir compte de gains d'efficacité spécifiquement ...

Suggested Citation

  • Jean-Claude Berthélemy & Robert Lensink, 1992. "An Assessment of the Brady Plan Agreements," OECD Development Centre Working Papers 67, OECD Publishing.
  • Handle: RePEc:oec:devaaa:67-en
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    File URL: http://dx.doi.org/10.1787/615827578321
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    References listed on IDEAS

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    1. Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-987, December.
    2. W. Max Corden, 1988. "Debt Relief and Adjustment Incentives," IMF Staff Papers, Palgrave Macmillan, vol. 35(4), pages 628-643, December.
    3. Jeffrey D. Sachs, 1989. "Developing Country Debt and Economic Performance. The International Financial System," NBER Chapters,in: Developing Country Debt and Economic Performance, Volume 1: The International Financial System, pages -12 National Bureau of Economic Research, Inc.
    4. Alain Ize & Guillermo Ortiz, 1987. "Fiscal Rigidities, Public Debt, and Capital Flight," IMF Staff Papers, Palgrave Macmillan, vol. 34(2), pages 311-332, June.
    5. Jeffrey D. Sachs, 1989. "Introduction to "Developing Country Debt and the World Economy"," NBER Chapters,in: Developing Country Debt and the World Economy, pages 1-34 National Bureau of Economic Research, Inc.
    6. Jeffrey D. Sachs, 1989. "Developing Country Debt and the World Economy," NBER Books, National Bureau of Economic Research, Inc, number sach89-3.
    7. Philippe Callier, 1989. "Debt Relief and Adjustment Incentives in a Financially Open Economy: Comment on Corden," IMF Staff Papers, Palgrave Macmillan, vol. 36(2), pages 514-522, June.
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    Cited by:

    1. Jean-Noël Ory, 1996. "Le financement des PVD par euro-obligations : rôle des procédures de réduction de dette et de desserrement des contraintes," Revue Tiers Monde, Programme National Persée, vol. 37(148), pages 829-852.

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