Odious Debt

Seema Jayachandran, Michael Kremer

Research output: Chapter in Book/Report/Conference proceedingChapter

2 Scopus citations


This chapter discusses the problem of illegitimate debt from a new angle. Instead of focusing on borrowers, it focuses on the role and incentives of creditors who lend to questionable governments for illicit purposes. This approach follows a theme that runs throughout the book: responsibility for bad loans should lie with lenders as much as borrowers. It is argued that as long as borrowing countries are obligated to repay bad debts, lenders will have no incentive to avoid bad loans. Furthermore, once a loan is made to an odious regime, no tribunal can be entrusted to label it as such, and charges of favoritism will always be made against the tribuna's decision.

Original languageEnglish (US)
Title of host publicationSovereign Debt at the Crossroads
Subtitle of host publicationChallenges and Proposals for Resolving the Third World Debt Crisis
PublisherOxford University Press
ISBN (Electronic)9780199783458
ISBN (Print)0195168003, 9780195168006
StatePublished - May 1 2006
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • General Economics, Econometrics and Finance


  • Bad loans
  • Borrowers
  • Creditors
  • Illegitimate debt
  • Lenders
  • Tribunal


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