Will the Sovereign Debt Market Survive?
Economic theory and evidence from a variety of debt markets shed light on current reform proposals concerning emerging market debt. Debt markets, including the U.S. municipal bond market, generally function best when the rights of creditors are protected most effectively. Since current IMF reform proposals significantly emasculate creditor rights, they are likely to have an adverse effect on the flow of new funds to sovereign borrowers.
Published: Shleifer, Andrei. "Will The Sovereign Debt Market Survive?," American Economic Review, 2003, v93(2,May), 85-90.