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Medientyp:
E-Artikel
Titel:
Odious Debt in an Imperfect World
Beteiligte:
Janus, Thorsten
Erschienen:
Wiley, 2012
Erschienen in:
Review of Development Economics, 16 (2012) 2, Seite 305-317
Sprache:
Englisch
DOI:
10.1111/j.1467-9361.2012.00663.x
ISSN:
1363-6669;
1467-9361
Entstehung:
Anmerkungen:
Beschreibung:
AbstractThe odious debt problem refers to a government's ability to borrow for elite consumption while the general population repays. Although an intuitive response is to ban lending to such regimes, this paper shows that if a government faces endogenous replacement risk, then an international odious debt doctrine which (i) decreases the country's debt ceiling; (ii) decreases the likelihood that the citizens must repay the debt; or (iii) increases the government's cost of borrowing for a given default risk can all decrease citizens' welfare. These findings suggest that, even when a regime is clearly odious, allowing it to borrow up to a point may be preferable to a complete lending ban.