A European perspective on public debt

Public debt in Europe has risen continuously over the last two decades. How is the transition to European Economic and Monetary Union, with the increasing economic interdependence between individual member states which it involves, likely to affect this situation? Which policy issues are of particular relevance in this setting?     

The external debt situation of the least developed countries

While the external debt of the least developed countries (LLDCs) is no threat to the international financial system, its adverse impact on the development efforts of many of these countries is severe. The following article examines their debt and economic situation and reviews major elements of the current international debt strategy with regard to their adequacy in bringing the LLDCs back to sustainable debt burdens and growth. The article was written while the author was working at the OECD. The views in the article are those of the author and do not reflect those of the World Bank or its affiliates or of the OECD.     

关于地方政府负债审计中的若干问题探讨

地方政府债务是指地方政府作为债务人按约定的条件向债权人承担为或不为的义务,即由地方政府及其职能部门直接借入、提供担保和反担保、欠账等形式形成的,最终必须由地方政府承担偿还责任的债务.本文就地方性政府债务问题进行了探讨.     

关于地方政府负债审计中的若干问题探讨

地方政府债务是指地方政府作为债务人按约定的条件向债权人承担为或不为的义务,即由地方政府及其职能部门直接借入、提供担保和反担保、欠账等形式形成的,最终必须由地方政府承担偿还责任的债务.本文就地方性政府债务问题进行了探讨.     

Testing explosive behavior of public debt in OECD countries

This paper examines the beginning and end of potentially speculative explosive public debt patterns occurring in 29 major OECD countries. The method we use is most appropriate for practical implementation with a time series and delivers a consistent date-stamping strategy for the origination and termination of multiple explosive behaviors. Our results also test that most OECD countries, except for Israel, Luxembourg, and Turkey, have experienced periods of explosive public debt. The stationarity of public debt varies by country. Approximately two-thirds of the explosive periods occurred prior to 2012. Based on the scale, structure, and safety of government debt for dynamic monitoring and evaluation, governments can improve risk management measures.     

Indicator systems for the assessment of the external debt situation of developing countries

The foreign indebtedness of the Third World has been increasing rapidly over the past ten years. The volume of private and public borrowings expanded between the end of 1970 and the end of 1979 from $ 64 bn to $ 376 bn¹. This development has quickened the interest in methods for an assessment of the external debt situation of developing countries. Interested parties—commercial banks, international organizations, etc., and the borrowers themselves—are looking for criteria by reference to which they can monitor foreign indebtedness and ascertain in good time whether and when the foreign debt of a country is in danger of reaching “critical” dimensions. What view should be taken of the various criteria?     

Pecking order and debt capacity considerations for high-growth companies seeking financing

This paper examines incremental financing decisions within high-growth businesses. A large longitudinal dataset, free of survivorship bias, to cover financing events of high-growth businesses for up to 8 years is analyzed. The empirical evidence shows that profitable businesses prefer to finance investments with retained earnings, even if they have unused debt capacity. External equity is particularly important for unprofitable businesses with high debt levels, limited cash flows, high risk of failure or significant investments in intangible assets. These findings are consistent with the extended pecking order theory controlling for constraints imposed by debt capacity. It suggests that new equity issues are particularly important to allow high-growth businesses to grow beyond their debt capacity.     

Crisis costs and debtor discipline: the efficacy of public policy in sovereign debt crises

Recent debate on the reform of the international financial architecture has highlighted the potentially important role of the official sector in crisis management. We examine how such public intervention in sovereign debt crises affects efficiency, ex ante and ex post. Our results shed light on the scale of capital inflows and the implications for debtor country output of such a regime. The efficacy of measures such as officially sanctioned stays on creditor litigation depend critically on the quality of public sector surveillance and the size of the costs of sovereign debt crises.     

New ways of financing LDCs

The forthcoming third plenary meeting of UNCTAD in Santiago will primarily consider how the less developed countries (LDCs) can be integrated more effectively into the world economic system. To solve the problem of development of the so-called “Third World” it is considered essential to open up new financial resources for the LDCs.     

Monetary policy in a developing economy with external debt: Theory and empirics

Using annual data from four open economies (Thailand, Indonesia, Mexico, and Chile), and estimating correlations and generalized impulse responses within the traditional vector autoregressive (VAR) analysis, we find that inflation, both in the short and long run, is negatively correlated with consumption, investment, and the stock of foreign debt. We propose an optimizing model of an open economy with outstanding foreign debt and borrowing constraint that could explain these empirics. In this economy, risk premium depends on creditworthiness measured by debt–income ratio. Firms operate under costly investment, and all transactions involving consumption and investment are subject to cash-in-advance (CIA) constraints.     

Forms of exports for LDCs

Development aid of the industrialized nations has taken as its focal point the promotion of nontraditional exports by LDCs. An important part of this endeavour is the spreading of enlightenment among LDCs about the possibility of finding marketing outlets for their direct and indirect exports.     

Fighting debt explosion in the European sovereign debt crisis

A number of tools have been suggested for solving the European sovereign debt crisis, in particular the options of leveraging the EFSF/ESM, introducing Eurobonds and a European Troubled Asset Relief Programme (Euro-TARP). However, it is unclear how these instruments will work, given jittery financial markets, the pending sovereign default of Greece and the fear of contagion among other countries. In the following paper, these policy tools will be analysed and evaluated with respect to their effects as well as their potential power to solve the debt crisis.     

Raw materials in the foreign trade of the LDCs

The developing countries’ championship of what they term an “integrated approach for raw materials” is one of the livellest subjects in the Federal Republic of Germany. Bonn suggests a pragmatic, as distinct from an ideological, approach — for the benefit of the Third World. For this reason it has to be analyzed, whether the raw material sector is the ideal basis for the improvement of the existing situation.     

Ethical considerations regarding public opinion polling during election campaigns

Commercial public opinion polling is an increasingly important element in practically all elections in democratic countries around the world. Poll results and pollsters are relatively new and autonomous voices in our human communities. Here I try to connect such polling directly to morality and democratic processes. Several arguments have been and might be used for and against banning such polling during elections, i.e., for and against effectively silencing these voices. I present the arguments on both sides of this issue, and try to show that there are reasonable responses to all the arguments in favour of banning polls. Then I review some proposed Canadian legislation concerning banning polls and, alternatively, requiring disclosure of methodological features of polls. Finally, I offer a model set of disclosure standards for the publication of poll results during election campaigns. Alex Michalos is the Editor-in-Chief of the Journal of Business Ethics, the Editor of Social Indicators Research and the author of 13 books and over 5 dozen articles. His five volume North American Social Report received the 1984 Canadian Secretary of State's Award for Excellence in Interdisciplinary Studies in the field of Canadian Studies. Volume One of his four volume Global Report on Student Well-Being has recently been released by Springer-Verlag.An earlier and longer version of this paper was written for and presented to the Canadian Royal Commission on Electoral Reform and Party Financing in June 1990.     

The nature of urbanisation in LDCs

The urbanisation experience of the less developed countries shows distinct differences to that of the industrialised countries. What are the reasons for this and what are the implications for development policy?     

Trade and development expectations of LDCs

The developing countries are likely to use UNCTAD III to vent their disappointment at this institution’s failure in the past to find a satisfactory solution for the questions of trade and development policy which are of interest to them. The great expectations of the developing countries have in fact been left essentially unfulfilled in regard to development aid, lower trade barriers and grant of preferential tariffs for manufactured and semi-manufactured products as well as in the difficult area of raw material policy.     

The role of the agricultural sector in LDCs

The growth strategies pursued by the vast majority of developing countries considerably neglect the agricultural sector. The following article discusses the main determinant factors for this discrimination, namely the shortcomings of macroeconomic as well as sectoral and project policies.     

Ramifications of debt restructuring on the euro area

The Greek government budget situation plays a central role in the debt crisis in the euro area. Strong consolidation measures need to be implemented, with potential adverse effects on the Greek economy and further credit requirements. Debt conversion might therefore become a reasonable alternative. The following paper provides some simulation-based calculations of the expected fiscal costs for the governments in the large European countries, Germany, France, Spain and Italy, arising from different policy options — among them a second Greek rescue package.     

The role of cooperatives in LDCs

Socio-economic conditions in LCDs generally are featuring a more or less naked dualism. The question has to be asked whether cooperatives could not be used as tools for dismantling this dualism.     

Perspectives on debt and deficits

Business Economics - Vast countries that borrow in their own currency have enormous latitude to run up debt. It’s not at all clear why this should be an urgent concern for us right now. If r...