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Sovereign Debt at the CrossroadsChallenges and Proposals for Resolving the Third World Debt Crisis$
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Chris Jochnick and Fraser A. Preston

Print publication date: 2006

Print ISBN-13: 9780195168006

Published to Oxford Scholarship Online: May 2006

DOI: 10.1093/0195168003.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 20 June 2021

Ethics, Market and Government Failure, and Globalization: Perspectives on Debt and Finance

Ethics, Market and Government Failure, and Globalization: Perspectives on Debt and Finance

Sovereign Debt at the Crossroads

J. E. Stiglitz (Contributor Webpage)

Oxford University Press

This chapter looks at the ethical aspects of globalization during the 1990s. It argues that in the way that they have sought to shape globalization, the advanced industrial countries and some of the multilateral institutions that they control have violated some basic ethical norms. Three central issues in the context of global finance are analyzed: the design of debt contracts between developed and developing countries and other aspects of lending behavior; the consequences of excessive debt; and broader issues associated with the global reserve system. Three types of ethical problems are discussed: (1) where markets (or international institutions) take advantage of their “power” and the weaknesses of the developing country to pursue their own interests at the expense of or risk to those in the developing countries; (2) where international financial institutions provide advice that works to the disadvantage of the developing countries; and (3) where the markets, and especially the international financial institutions, have not done as much as they could for the well-being of the developed countries.

Keywords:   global finance, lending behavior, developing countries, bankruptcy regimes, debt forgiveness, global economic system

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