Do We Have to Rethink Sovereign Debt of Developing Countries?

Do We Have to Rethink Sovereign Debt of Developing Countries?

Wissem Ajili (Eslsca Paris Business School, France)
DOI: 10.4018/978-1-7998-4459-4.ch028
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Abstract

The chapter joins new reflections interested in measuring welfare and social progress. The main objective is to determine whether the sovereign debt management process in developing countries is economically viable, socially equitable, and ecologically sustainable. The analysis advocates rethinking the sovereign debt around the idea of social sustainability, that is, the non-questioning of the living conditions of present and future generations and their economic, social, and political choices. The chapter suggests the need for developing countries (1) to ensure a comprehensive management of public debt based on the co-responsibility of both the indebted countries and their creditors, (2) to borrow in priority to finance the most productive investment expenditures, which can have an impact on the populations' standards of living and on economic prosperity, and (3) to reduce the use of austerity programs and anti-social policies.
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Sovereign Debt: The Inadequacies Of The Theoretical Framework And The Limits Of The Measurement Tools

The chapter deals with a slippery concept that is “sovereign debt”. Numerous definitions do exist, including the national government’s debt, the central government’s debt, and public debt in foreign currencies. While some consider sovereign debt to include just liabilities of the central government, other extend the concept to the central bank debts. In some cases, the term sovereign debt is interchangeably used by the terms of public debt or government debt (Abbas, Pienkowski & Rogoff, 2019).

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