Martin Guzman and Joseph E. Stiglitz
FES New York – International Policy Analysis, October 2016
As authors Martin Guzman and Joseph Stiglitz show, sovereign lending markets are not working well. The current system remains fraught with perverse incentives that lead to destructive and inequitable outcomes. In September, 2015, the United Nations General Assembly approved nine principles to guide sovereign debt restructuring processes. These are: sovereignty, good faith, transparency, impartiality, sovereign immunity, legitimacy, sustainability, and majority restructuring. This timely brief analyzes the usefulness of the nine principles and discusses to what extent countries can use them as an effective tool. The brief concludes with a strategic discussion on how to move reform efforts forward.
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