Defusing Default: Incentives and Institutions (Inter-American Development Bank) - Softcover

Softcover

ISBN 10: 1886938989 ISBN 13: 9781886938984

Publisher: Inter-American Development Bank, 2002

Synopsis

How much protection should a country's judicial system afford creditors? The answer has far-reaching implications for the functioning of credit markets, particularly in developing regions such as Latin America, where creditor rights are uneven and enforcement often lax.

Defusing Default uses a variety of perspectives and tools, including theoretical modeling and cross-country evidence, to examine the costs and benefits of protecting creditor rights. Case studies look at creditor protection in Argentina, Brazil, Chile, Costa Rica, Paraguay and Peru.

The studies find that more effective judicial enforcement would help to make more credit available and improve the overall performance of the credit market. Another finding is that private contracting in credit markets, including information-sharing arrangements, can help compensate for legal deficiencies and create incentives to limit default in countries where judicial enforcement is costly or ineffective. Finally, the book explores the political economy of debt moratoria by examining bailouts and bankruptcy.

About this title

About the Author:

Marco Pagano is professor of economics at the University of Salerno, Italy and co-director of the Financial Economics Research Programme of the Centre for Economic Policy Research in London

About this edition

• Publisher: Inter-American Development Bank
• Publication date: 2002
• ISBN 10: 1886938989
• ISBN 13: 9781886938984
• Binding: Paperback
• Number of pages: 250
• Editor: Marco Pagano