Global Debt Research Articles

Crisis and Opportunity: Environmental NGOs, Debt-for-Nature Swaps, and the Rise of 'People-Centred' Conservation

Abstract This article presents a history of the rise of 'people-centred' conservation in international environmental Non-Governmental Organisations (NGOs) during the global debt crisis of the early 1980s. In the mid-1980s, many NGOs embraced complicated financial arrangements called 'debt-for-nature swaps' to relieve the debt crisis and to promote environmental conservation in many developing nations. The swaps presented an opportunity for NGOs to promote environmental protection in the developing world in an era of crisis. Yet the implementation of the swaps reveal the challenges major environmental NGOs faced in incorporating new ideas about indigenous participation into their policies. The swaps came just as many of the leading environmental NGOs embraced market-oriented solutions to conservation issues and also adopted 'people-oriented' conservation strategies. Conservationists had a troubled history with indigenous peoples, but this article reveals how, by the late 1970s, many NGOs came to view them as allies in conservation efforts. Yet NGOs struggled to reconcile their desire for indigenous participation with the institutional demands of the swaps. Two brief case studies of swaps in Bolivia and Madagascar show how institutional and political challenges undermined a successful implementation of this new participatory vision. This article thus expands on scholarship of the relationship between environmentalists, native populations, and 'wilderness' ideology by showing how many leading environmental NGOs came to find a place for people in parks by the late twentieth century. It also highlights how the institutionalisation of the environmental movement into large NGOs both provided new opportunities to promote environmental protection and created constraints on individuals in implementing new ideas.

Climate Change as Climate Debt: Forging a Just Future

Climate change may be the most far-reaching manifestation of white privilege and class privilege to face humankind. Caused overwhelmingly by high-consuming people, climate change is wreaking death and destruction foremost on impoverished people, who also are disproportionately people of color. This essay first posits climate change as a compelling moral matter of “race- and class-based climate debt” and “Global North climate debt.” A second part draws upon the descriptive and transformative tasks of Christian ethics as a critical discourse to frame a moral response. Finally, the essay illustrates implications for public policy. I propose the concepts of “climate privilege,” “climate violence,” and “blinders of climate privilege” as tools for demystifying our situation; “climate reparations” as a dimension of a moral response; and “atmospheric citizenship” as a tool for moral identity.

Debt risks and risk management of public debt: survey from theory to practice

In fact looking back since the start of the global financial crisis in 2007-2008, most of the developed countries have high debt ratio significantly higher than normal acceptable threshold is 60%. What has affected the initial scenario and why many different models used a pole tuh not detect risks of public debt until the worst consequences has flared after it is amplified and led to the breakdown in the global debt markets? Until now, many questions still posed whether policymakers had the right tools to prevent and repair the system before the concerns related to the credit risk of public debt occurred in the background economic reality or not? Practice has proved a panacea not only in the risk management of public debt is proved superiority. This article discusses the concept and how comprehensive management of credit risk from the perspective of the analysis combined with the macro-financial aspects that the IMF has warned.

Is There a Role for Islamic Bonds in Global Diversification Strategies? An Empirical Analysis of Risk Transmissions and Dynamic Correlations

This paper explores international diversification benefits of Islamic bonds (sukuk) by examining dynamic spillovers and correlations between sukuk and conventional bond and stock markets. Asymmetric volatility spillover effects are observed from global debt and equity markets to Islamic bonds, suggesting that volatility on conventional markets has opposite spillover effects on Islamic bonds. The analysis of dynamic correlations suggests a low degree of association between these securities and global stock markets with episodes of negative correlations observed, particularly during market crisis periods. The low degree of correlation plays a significant role in the performance of these securities as diversifiers for global stock portfolios. We observe that Islamic bonds can provide valuable diversification benefits for conventional stock portfolios that are not possible to obtain from conventional bonds, underscoring the significance of Islamic bonds as a viable alternative to its conventional counterparts.

The Effect of the Global Financial Crisis and the Sovereign Debt Crisis on Public Sector Accounting: A Contextual Analysis

This paper examines the effect of global financial crisis and the sovereign debt crisis on public sector accounting. The global financial crisis and sovereign debt crisis were contextually analysed bringing out clearly its effect on public sector accounting which include accounting issues related to public sector intervention, accounting for recapitalization of investment, accounting for fiscal support, accounting for financial guarantees. The paper found out that, the unresolved fiscal and debt problems in some European countries and elsewhere could threaten the global economy. The implication of this is that, there is need for transparent financial reporting by government and improvement in the management of public sector resources. That, third world countries should avoid sub optimal debts structure.

Inter-linkages between India and World Stock Markets and European Debt Crisis

This paper examines the inter-linkages and long run co-integration of Indian economy with other economies of the world (US, Europe, Other Emerging markets, and World economy) using standard indices of MSCI over the period April, 2001 to March, 2013. We also investigate Indian economys response to recent global turbulence European Debt crisis (EDC). We use Granger causality test, Johansen co-integration test and Impulse response analysis of Vector auto-regression framework to test various hypotheses. There is no contagious effect of EDC on Indian economy. During post-EDC, the Indian economy is granger caused by US and world economies. Further during the pre as well as post- EDC period, no cointegrating relationship has been found. This low level of co integration, despite presence of short run causal relationship, shows that global shocks might destabilize Indian economy in long run. Especially, Impulse response analysis revealed that Indian economy seems to be affected from the shocks created in the European markets and such shock persists in Indian economy for more than 10 months. These results have important policy implications. The policy makers need to understand that although there is no contagious effect of EDC on Indian economy but interdependency can destabilize Indian economy for much longer period.

The Global debt crisis: haunting U.S. and European federalism

Debt crises have placed strains not only on the European Union's nascent federal system but also on the federal system in the United States. Old confrontations over fiscal responsibility are being renewed, often in a more virulent form, in places as far flung as Detroit, Michigan, and Valencia, Spain, to say nothing of Greece and Cyprus. Increasing the complexity of the issue has been public sector collective bargaining, now a component of most federal systems. The attendant political controversies have become the debate of a generation. Paul Peterson and Daniel Nadler have assembled experts from both sides of the Atlantic to break down the structural flaws in federal systems of government that have led to economic and political turmoil. Proposed solutions offer ways to preserve and restore vibrant federal systems that meet the needs of communities struggling for survival in an increasingly unified global economy. Contributors: Andrew G. Biggs (American Enterprise Institute); Cesar Colino (National Distance Education University, Madrid, Spain); Eloisa del Pino (Instituto de Politicas y Bienes Publicos, Madrid, Spain); Henrik Enderlein (Hertie School of Governance, Berlin, Germany); Cory Koedel (University of Missouri, USA); Carlos Xabel Lastra-Anadon (Harvard University, USA); Daniel Nadler (Harvard University, USA); Shawn Ni (University of Missouri, USA); Amy Nugent (Government of Ontario, Canada); James Pearce (Mowat Centre, University of Toronto, Canada); Paul E. Peterson (Harvard University, USA); Michael Podgursky (University of Missouri, USA); Jason Richwine (Washington, D.C. USA); Jonathan Rodden (Stanford University, USA); Daniel Shoag (Harvard University, USA); Richard Simeon (University of Toronto, Canada); Camillo von Muller (University of St. Gallen, Switzerland, and Leuphana University, Germany); Daniel Ziblatt (Harvard University, USA)

Book Reviews

Ugo Troiano of the University of Michigan reviews “The Global Debt Crisis: Haunting U. S. and European Federalism”, by Paul E. Peterson and Daniel J. Nadler. The Econlit abstract of this book begins: “Eleven papers, previously presented at a conference held at Harvard University in August 2012, and revised prior to publication, examine the structural flaws in federal systems of government across the globe that have led to economic and political turmoil and present solutions to preserve and restore federal systems that meet the needs of struggling communities. Papers discuss federalism's emerging fiscal crisis; competitive federalism under pressure; whether market discipline can survive in the U.S. federation; putting a price on teacher pensions; structural flaws in the design of public pension plans; past and present high-risk investments by states and localities; between centralization and federalism in the European Union; German federalism at the crossroads; Spanish federalism in crisis; regional identity and fiscal constraints in Spanish federalism; and the resilience of Canadian federalism. Peterson is Henry Lee Shattuck Professor of Government and Director of the Program on Education Policy and Governance at Harvard University, and Senior Fellow at the Hoover Institution. Nadler is a PhD candidate at Harvard University.”

Which is the optimal fiscal rule in a monetary union? Targeting the structural, the global budgetary deficit, or the public debt?

AbstractThe aim of our paper is to contribute to the debate on optimal fiscal rules in a monetary union: in terms of global budgetary deficit, of structural budgetary deficit, or of public debt. Indeed, these rules seem to be mixed in the framework of the European Economic and Monetary Union, with the new Fiscal Compact. With the help of a simple macroeconomic model, we show that a goal in terms of public debt is the most appropriate in order to decrease the indebtedness levels, but that it could increase the recessionary risks for the most indebted European countries. Goals in terms of global budgetary deficit or public debt are the most appropriate to limit the budgetary activism and to stabilize fiscal variables in case of demand or supply shocks. However, a goal in terms of structural budgetary deficit is the most appropriate in order to stabilize economic activity levels in case of asymmetric demand or supply shocks.

The European financial crisis - a challenge for ten-year German government bond yield forecasts?

The global financial crisis and European sovereign debt crisis did have major impacts on the whole European monetary union as well as on interest rates at the short and long end of the yield curve. In the case of Germany the flight to quality effect did have substantially impact on long term government bond yields. These to some extent surprising events might have been puzzling for professional interest rate forecasters as well. In order to investigate the quality survey predictions during the financial crisis and European sovereign debt crisis it will be tested for long-run relationships, for structural breaks in these relations as well as for short run dynamics.

Financial Markets and the Global Debt Crisis: Toward a New Architecture for A More Reliable Financial Sector

Financial Markets and the Global Debt Crisis: Toward a New Architecture for A More Reliable Financial Sector

Financial Markets and the Global Debt Crisis: Toward a New Architecture for A More Reliable Financial Sector

The breakdown of the financial markets in 2007 and the ensuing debt crisis in the EU has produced enormous mistrust in financial products and the monetary system. The emergence of shadow banking also changed the behavior patterns of management so that its self-interest dominated the interests of shareholders and the other stakeholders. These false incentives led to merger processes in the financial system resulting in market structures in which single institutions became too big or too connected to fail. The empirical developments and the political counter-measures described in this article point to the fact that the macro-perspective has been dominant, neglecting individual irresponsibility and failure.

Wpływ nadmiernego zadłużenia zagranicznego na koniunkturę gospodarczą na przykładzie krajów Ameryki Łacińskiej

The article examines excessive indebtedness at the country level. The study covers the years 1975–1995, during which this problem affected particularly medium-developed countries and the lack of its solution implied a threat of a global economic crisis. This was one of the most serious global economic crises and global debt crises to have occurred in the general history of finance, seriously destabilising economies and the political situation. The political sphere also to some extent conditioned the procedure for its solution.

The UK's banking system as financial hub for Islamic banking

This paper examines phenomenon of London as the Islamic banking hub. It contends that London has become not only an international centre for Islamic finance, but also that there is big interest and demand for Islamic banking products. The authors are also positive that Islamic banking may be a certain solution for problems that Europe has been suffering since 2007 when global debt crisis started. Our intention is to attract other researchers to this subject, as we believe Islamic finance may play an important role in future of global financial markets.

The Global Debt Trap: How to Escape the Danger and Build a Fortune by Claus Vogt and Roland Leueschel

DOI: http://dx.doi.org/10.3329/jbt.v7i2.16454 Journal of Business and Technology Vol.7(2) 2012: 57-61

Maurizio Lazzarato, The Making of the Indebted Man: Essay on the Neoliberal Condition

Maurizio Lazzarato, The Making Indebted Man: Essay on Neoliberal Condition. Translated by Joshua David Jordan. Los Angeles: Semiotext(e), 2012, 1,999 pp., $13.95 paper(9781584351153) In this brief yet dense theoretical treatise, set out in three brisk chapters and a conclusion, Paris-based Italian sociologist and philosopher, Maurizio Lazzarato, offers an exploration and genealogy economic and subjective production indebted in what he calls neoliberal age (p. 9). This age, according to author, began in mid1970s with changes to financing structure welfare such that Western central banks were forbidden to coin interest-free money to ease public debt, and Western countries were compelled to turn to financial markets to service their deficits. The subsequent indebtedness both individuals, states, and even entire world to powerful private interests reveals extent to which markets have been able to plunder population over last forty years (p. 19). Lazzarato is concerned not simply with fact global debt, but more with its fundamentally class-based nature. Finance, he insists, is above all a power between owner capital and nonowner, between creditor and debtor. This transcends and precedes all other social relations, even capital and labour, since everyone is included within it, including children and poor, who may have no access to credit, yet remain indebted via (p. 32). Indeed, money economy comes before and determines market economy (rather than other way around). What is more, creditor-debtor power relation is fundamentally asymmetrical, so undermining classical economic theories commercial exchange that imply and presuppose equality between buyer and seller (p. 33), and quashing fantasy whereby state and society begin with a contract (p. 43). In On Genealogy Morality, Friedrich Nietzsche demonstrated his understanding primordial primacy creditor-debtor relation and precedence credit to exchange. Debt, as a promise repayment and a guarantee self-worth, first began to engender memory, conscience, repression, calculation, duty, and guilt. It is origin subjective evaluation between men, and subjectivation--the labour man on himself such that he is made predictable, accountable, and answerable to his creditor (p. 42). Through debt, moreover, capitalism bridges gap between present and future, which results in objectivation time--the elimination future choice and possibility in subordination to reproduction capitalist power relations (p. 46). The strange sensation, Lazzarato writes, of living in a society without time, without possibility, without foreseeable rupture, is debt (p. 47). A young Karl Marx, Lazzarato maintains, echoed these Nietzschean notes in his early essay, Comments on James Mill. Creditordebtor seems to run counter to capital-labour, for latter is a relationship between things, whereas former appears to establish trust between fellow human beings. Such abolition estrangement, however, is superficial. Debt actually completes alienation by exploiting man's moral existence, social existence, and the inmost depths his heart (p. 56). Through indebtedness, trust becomes universal distrust, which turns into a demand for security and ultimately intervention. In case welfare, Lazzarato observes, erstwhile social rights have been transformed into latter-day debts, about which recipients services are to feel guilty and for which they are to have their private lives examined in order to determine their validity and their conformity to norms providing institution. …

University Governance at the Crossroads: The Italian Case

The financial crisis and the growth of global public debt require more attention than in the past inmanaging resources. Currently most of public organizations have financial and economic difficulties inresponse to the reduced government funding. Hence Italian universities are changing their governanceforms which require new competences and good practices in management.The aim of the paper is to propose the model of governance that is emerging in Italy after the introductionof the law 240/2010, with particular reference to Public Universities’ choices about numerousness andcomposition of their boards of directors.After the description of the Italian case, a brief review of prior literature on University Governance andsome citation to New Public Management are provided to introduce the relevant concepts (theoreticaldevelopment).In addition, the survey provides a conceptual framework on governance models in order to discuss theaim of the paper in a broader context. Methodology and results are outlined later. The sample analyzed iscomposed of 56 Italian Public Universities that have modified their organizational structure through theirstatutes. Finally the paper’s conclusions are presented together with suggestions for further research.

Undead-Ends: Zombie Debt/Zombie Theory

This essay examines the ways in which contemporary economic discourse uses the zombie metaphor. It situates these uses in relation to the current resurgence of zombies in popular fiction and film, and distinguishes zombies from vampires: while the former signifies global debt and stagnation, the latter connotes credit and consumer boom. It argues that the arc of desire and fear engendered by these figures of horror discloses a continuity in the affective trajectory of neo-liberalism as it supplants traditional philosophical distinctions between material and symbolic forms of debt. Rather than operating with a distinction between spiritual and financial modes of guilt/debt, an economic absorption of cultural values circumvents the need for subjective or symbolic inscriptions, and institutes the debt-relation directly and materially.

External debt of post-communist countries

On the background of continuous global economic instability and debt problems in the Eurozone, the significance of post-communist external debt goes without saying. The article will explore the scope and dynamics of external indebtedness in the post-communist world in a comparative and historical framework. Particular attention will be paid to a likelihood of a debt crisis in the region similar to the one in the developing world in the early 1980s. The debt crisis will be an ultimate price for reform mistakes and may have serious political economy implications by hampering or even reversing the process of the post-communist transformation.

Fiscal Policy Coordination and the Future of the Community Method

The global financial and sovereign debt crises led to the creation of numerous new agreements and institutions to contain the current crisis and prevent future ones. These measures reinforce the historical trend towards the predominance of intergovernmental decision-making in economic and monetary union (EMU), going so far as to re-intergovernmentalize cooperation that had previously been decided upon by the Community method. Using principal–agent analysis, this contribution looks at fiscal policy cooperation since the outbreak of the sovereign debt crisis and considers how the impact of re-intergovernmentalization is manifested largely in the policy process rather than the policy outcome. However, this is still cause for concern given the precarious nature of EMU’s legitimacy and the loss of efficiency that delegation typically provides.