Developing country debt crises have been a recurrent phenomenon over the past two centuries. Despite the fact that several developing countries now have stronger economic fundamentals than they did in the 1990s, sovereign debt crises will recur. Indeed, today we are in the midst of an almost unprecedented global ‘bust’. The conventional wisdom today is that the international economic and financial system is broken. The call in this book for international reform of sovereign debt workouts derives from both economic theory and real‐world experiences of different processes used for debt workouts. ... More

Developing country debt crises have been a recurrent phenomenon over the past two centuries. Despite the fact that several developing countries now have stronger economic fundamentals than they did in the 1990s, sovereign debt crises will recur. Indeed, today we are in the midst of an almost unprecedented global ‘bust’. The conventional wisdom today is that the international economic and financial system is broken. The call in this book for international reform of sovereign debt workouts derives from both economic theory and real‐world experiences of different processes used for debt workouts. Country case studies underline the point that we need to do better. We recognize that the politics of the international treatment of sovereign debt has not supported systemic reform efforts thus far; however, failure in the past does not preclude success in the future in an evolving international political environment, and the book thus puts forth alternative reform ideas for consideration.