TY  - JOUR
AU  - Berg,Andrew
AU  - Sachs,Jeffrey
TI  - The Debt Crisis:  Structural Explanations of Country Performance
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2607
PY  - 1988
Y2  - June 1988
UR  - http://www.nber.org/papers/w2607
L1  - http://www.nber.org/papers/w2607.pdf
N1  - Author contact info:
Andrew Berg
International Monetary Fund
700 19th Street NW
Washington DC 20431
Tel: 202-623-8843
Fax: 202-589-8843
E-Mail: aberg@imf.org

Jeffrey D. Sachs
The Earth Institute at Columbia University
314 Low Library
535 West 116th Street, MC 4327
New York, NY  10027
Tel: 212/854-8704
Fax: 212/854-8702
E-Mail: sachs@columbia.edu
AB  - This paper develops a cross-country statistical model of debt rescheduling, and the secondary market valuation of LDC debt, which links these variables to key structural characteristics of developing countries, such as the trade regime, the degree of income inequality, and the share of agriculture in GNP Our most striking finding is that higher income inequality is a significant predictor of a-higher probability of debt rescheduling in a cross-section of middle-income countries. We attribute this correlation to various difficulties of political management in economies with extreme inequality. We also find that outward-orientation of the trade regime is a significant predictor of a reduced probability of debt rescheduling.
ER  -