POLI 445 Lecture Notes - Lecture 14: Structural Adjustment, Government Debt, Debt Crisis
30 Jan 2018
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Introduction: people will look back on this time period and criticize saps. First: imf was poorly equipped to do the job of debt rescheduling. Short-term lending (debt was long-term: mismatch between what the problem was and what the imf"s tools were. Imf didn"t have a lot of money; their loans were a "drop in the bucket" Imf was only able to provide short-term money to allow bc"s to pay small amounts of interest. Imf loans were meant to demonstrate borrower"s "good faith" to lenders /lending countries" governments: they hoped this would encourage private lenders to lend more, conditionality seen as part of this - frieden: imf loan "stamp of approval" Imagine a country"s government as a firm going bankrupt - there"s no de jure equivalent to public law bankruptcy. So, we got the baker plan first, then the brady plan and basel accords: and this is where the imf got involved.
