Technical, Ethical, and Political Issues in Measuring the Over-Indebtedness of Low-Income Countries
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Trying to measure over-indebtedness can be seen as an attempt to legitimate decisions such as debt rescheduling, debt relief, or debt cancellation. When the HIPC initiatives introduced such measures in 1996, the choice of thresholds was made by following a specific approach (debt overhang) that is very different from other rationales such as altruism, which is based on ethical grounds. Yet debt reduction was presented as being aimed at reducing poverty. Although this approach was called into question by the MDRI (Multilateral Debt Relief Initiative), it is making a surprising comeback under the IDA-IMF Debt Sustainability Framework.
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