Debt Games: Strategic Interaction in International Debt Rescheduling

by Vinod K. Aggarwal

International debt rescheduling, both in earlier epochs and our present one, has been marked by a flurry of bargaining. In this process, significant variation has emerged over time and across cases in the extent to which debtors have undertaken economic adjustment, banks or bondholders have written down debts, and creditor governments and international organizations have intervened in negotiations. Debt Games develops and applies a situational theory of bargaining to analyze the adjustment undertaken by debtors and the concessions provided by lenders in international debt rescheduling. This approach has two a focus on each actor's individual situation, defined by its political and economic bargaining resources, and a complementary focus on changes in their position. The model proves successful in accounting for bargaining outcomes in eighty-four percent of the sixty-one cases, which include all instances of Peruvian and Mexican debt rescheduling over the last one hundred and seventy years as well as Argentine and Brazilian rescheduling between 1982 and 1994.

632 pages, Kindle Edition

Published April 26, 1996

About the author

VINOD K. AGGARWAL is Professor in the Department of Political Science, Affiliated Professor of Business and Public Policy in the Haas School of Business, and Director of the Berkeley Asia Pacific Economic Cooperation Study Center (BASC) at the University of California at Berkeley. He is the founder and Editor-in-Chief of the journal Business and Politics. Aggarwal's books include Liberal Protectionism, International Debt Threat, Debt Games, Le Renseignement Stratégique d'Entreprise, Crafting Nested Institutions, Les Horloges Sociales de la Confrontation, and Asia Pacific Crossroads.