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Debt in the time of COVID-19: creditor choice and the failures of sovereign debt governance

Debt in the time of COVID-19: creditor choice and the failures of sovereign debt governance While countries in the Global North have staved off the worst economic and health effects of the COVID-19 pandemic through massive stimulus spending, this option has been unavailable to many low- and middle-income countries, largely because high debt burdens have constrained fiscal spending. Nevertheless, almost no debt relief has materialized. The ad hoc approach to sovereign debt governance that emerged out of the debt crises of the 1980s helps explain why. It established an absolute commitment to upholding the right of private creditors to choose whether to participate in debt restructurings that has helped obstruct all significant sovereign debt governance reforms, preventing meaningful debt relief even in the context of the worst humanitarian crisis since the Great Depression. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Area Development and Policy Taylor & Francis

Debt in the time of COVID-19: creditor choice and the failures of sovereign debt governance

Potts, Shaina
Area Development and Policy , Volume 8 (2): 16 – Apr 3, 2023
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16 pages

Debt in the time of COVID-19: creditor choice and the failures of sovereign debt governance

Abstract

While countries in the Global North have staved off the worst economic and health effects of the COVID-19 pandemic through massive stimulus spending, this option has been unavailable to many low- and middle-income countries, largely because high debt burdens have constrained fiscal spending. Nevertheless, almost no debt relief has materialized. The ad hoc approach to sovereign debt governance that emerged out of the debt crises of the 1980s helps explain why. It established an absolute...
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Publisher
Taylor & Francis
Copyright
© 2023 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.
ISSN
2379-2957
eISSN
2379-2949
DOI
10.1080/23792949.2023.2174887
Publisher site
See Article on Publisher Site

Abstract

While countries in the Global North have staved off the worst economic and health effects of the COVID-19 pandemic through massive stimulus spending, this option has been unavailable to many low- and middle-income countries, largely because high debt burdens have constrained fiscal spending. Nevertheless, almost no debt relief has materialized. The ad hoc approach to sovereign debt governance that emerged out of the debt crises of the 1980s helps explain why. It established an absolute commitment to upholding the right of private creditors to choose whether to participate in debt restructurings that has helped obstruct all significant sovereign debt governance reforms, preventing meaningful debt relief even in the context of the worst humanitarian crisis since the Great Depression.

Journal

Area Development and Policy – Taylor & Francis

Published: Apr 3, 2023

Keywords: debt; COVID-19; austerity; Debt Service Suspension Initiative (DSSI); Common Framework; 债务; 2019 冠状病毒疾病; 严厉; 《暂停偿债倡议》; 通用框架; deuda; COVID-19; austeridad; Iniciativa de Suspensión del Servicio de la Deuda; marco común; долг; COVID-19; жесткая экономия; DSSI; Общая структура

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