Odious debt

Seema Jayachandran*, Michael Kremer

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

45 Scopus citations

Abstract

Trade sanctions are often criticized as ineffective because they create incentives for evasion or as harmful to the target country's population. Loan sanctions, in contrast, could be self-enforcing and could protect the population from being saddled with "odious debt" run up by looting or repressive dictators. Governments could impose loan sanctions by instituting legal changes that prevent seizure of countries' assets for nonrepayment of debt incurred after sanctions were imposed. This would reduce creditors' incentives to lend to sanctioned regimes. Restricting sanctions to cover only loans made after the sanction was imposed would help avoid time-consistency problems.

Original languageEnglish (US)
Pages (from-to)82-92
Number of pages11
JournalAmerican Economic Review
Volume96
Issue number1
DOIs
StatePublished - Mar 1 2006

ASJC Scopus subject areas

  • Economics and Econometrics

Fingerprint Dive into the research topics of 'Odious debt'. Together they form a unique fingerprint.

Cite this