## _wp06186

## Source details

**Canonical URL:** [_wp06186](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2006/_wp06186.pdf)

## Other formats

- [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2006/_wp06186.pdf.md)
- [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2006/_wp06186.pdf.json)

---

### Background and motivation
- Rapid international integration of capital markets increased opportunities and exposure to sudden shifts in market sentiment and financial crises for emerging market countries (EMCs).
- Crisis resolution typically involved sizable official financial assistance to support economic adjustment, easing liquidity pressures and restoring confidence.
- Countries may emerge from crises with increased debt-related vulnerabilities and risk of recurrent distress.

### Conceptual channels for increased debt-related vulnerabilities
- Debt levels relative to repayment capacity may increase because of:
  - sharp depreciation of the exchange rate,
  - an increase in real interest rates,
  - a contraction in output.
- Debt burden may increase from new borrowing during crisis resolution (external and domestic).
- Post-crisis vulnerabilities can stem from crisis-induced changes in debt composition, including:
  - maturity composition,
  - currency composition,
  - changes in the creditor base that increase debt rigidity.
- De facto seniority of multilateral claims (preferred creditor status) insulates these claims from restructuring and enables multilateral institutions to take on crisis risks.

### Sample, definitions, and data notes
- Sample countries: Argentina, Brazil, Ecuador, Indonesia, Korea, Mexico, Philippines, Russia, Thailand, Turkey, Ukraine, Uruguay.
- External debt = claims of nonresidents on the public sector; domestic debt = claims of residents on the public sector (definition follows World Bank’s Global Development Finance).
- Crisis years (t) used in the study:
  - Argentina 2001; Brazil 1998; Ecuador 1999; Indonesia 1998; Korea 1997; Mexico 1995; Philippines 1998; Russia 1998; Thailand 1997; Turkey 2001; Ukraine 1998; Uruguay 2002.

### Evolution of sovereign debt levels: immediate post-crisis dynamics
- Average changes from t–1 to t+1:
  - Gross public debt as a share of GDP increased on average by 36 percentage points.
  - Net public debt increased on average by about 32 percentage points.
- Pre-crisis and post-crisis averages (from Figure 1):
  - Gross debt: Pre-crisis (t–1) average: 44% ; Post-crisis (t+1) average: 80%
  - Net debt: Pre-crisis (t–1) average: 36% ; Post-crisis (t+1) average: 68%
- Increases in central bank international reserves in some Asian cases between t–1 and t+1:
  - Indonesia +11 percentage points of GDP; Korea +9 percentage points; Philippines +8 percentage points; Thailand +6 percentage points.
- Cross-country heterogeneity:
  - Argentina, Indonesia, and Uruguay: net debt-to-GDP ratio rose by more than half the size of GDP over the two-year period.
  - Mexico: net debt-to-GDP declined from 41 percent in t–1 to 36 percent in t+1.

### Decomposition of change in net debt-to-GDP (change from end of t–1 to end of t+1; contributions are percent of GDP)
- Country-level changes and contributors (change | primary balance | real interest rate | real GDP growth | exchange rate depreciation | residual):
  - Argentina (2001): 88.5 | –1.1 | 3.2 | 6.2 | 63.4 | 16.7
  - Brazil (1998): 30.5 | –3.2 | 19.0 | –0.5 | 16.8 | –1.6
  - Ecuador (1999): 16.9 | –11.1 | –60.5 | 1.2 | 90.7 | –3.3
  - Indonesia (1998): 59.5 | –3.3 | –5.8 | –0.1 | 22.1 | 46.7
  - Korea (1997): 18.7 | 4.7 | 0.5 | 0.7 | 2.2 | 10.7
  - Mexico (1995): –5.2 | –14.7 | 5.4 | 0.2 | 38.3 | –34.3
  - Philippines (1998): 8.5 | –2.3 | –1.3 | –2.1 | 10.6 | 3.5
  - Russia (1998): 28.5 | 0.7 | –27.5 | –0.1 | 79.5 | –24
  - Thailand (1997): 25.7 | 4.2 | –0.4 | 0.6 | 0.7 | 20.5
  - Turkey (2001): 36.9 | –9.6 | –7.3 | –1.7 | 42.9 | 12.6
  - Ukraine (1998): 22.4 | 0.2 | –6.6 | 0.5 | 15.7 | 12.6
  - Uruguay (2002): 54.3 | –3.4 | –9.3 | 2.4 | 54.2 | 10.3
- Average contributions (t–1 to t+1):
  - Change in public debt-to-GDP ratio: 32.1
  - Primary balance: –3.2
  - Real interest rate: –7.6
  - Real GDP growth: 0.6
  - Exchange rate depreciation: 36.4
  - Residual: 5.9
- Key driver: nominal exchange rate depreciation typically contributed most (average contribution: 36.4 percentage points).

### Evidence on debt reversals (first three post-crisis years)
- Outcomes varied; fiscal consolidation, structural reforms, and prudent monetary policy did not always yield significant debt reductions within three years.
- Debt-to-GDP returned to or below pre-crisis levels within three years: Ecuador, Mexico, Russia (debt restructurings contributed: Ecuador decline of 13 percentage points in 2000; Russia decline of 32 percentage points in 2000).
- Korea, the Philippines, Ukraine: broadly neutralized crisis impact on sovereign debt by end of third post-crisis year (though not fully back to pre-crisis levels).
- Persistent elevation (~30 percentage points above pre-crisis) at end of t+3 (t+2 for Turkey and Uruguay): Brazil, Thailand, Turkey, Uruguay. Turkey and Uruguay showed declining trends; Brazil and Thailand continued growth in t+2 and t+3.
- Extreme persistence (>50 percentage points above pre-crisis at t+3): Argentina, Indonesia.
  - Argentina: net sovereign debt-to-GDP declined sharply after debt exchange with external private creditors in 2005 and early repayment of IMF credit in January 2006.
  - Indonesia: debt ratio reduced by 22 percentage points of GDP between t+3 and t+5 but remained high at 49 percent of GDP at end-2003.
- Post-crisis debt evolution generally unrelated to pre-crisis debt levels.

### External debt versus domestic debt: composition and timing (seven-year span beginning t–2)
- Average contributions to overall debt-to-GDP growth over the horizon:
  - Domestic debt increased on average by 16 percentage points of GDP.
  - External debt (net of financing used to build international reserves) contributed 10 percentage points.
- Stage-dependent patterns:
  - Run-up (t–2 and t–1): domestic debt grew faster than external debt on average (notable in Brazil, Mexico, Uruguay where domestic debt increased by >8 percentage points of GDP in year prior to crisis).
  - Crisis year (t): external public debt typically dominated debt dynamics—sharp rise in external public debt share due to exchange rate depreciation and emergency multilateral support.
  - Aftermath (t+1 through t+4): domestic debt share typically continued to rise while external debt share declined.
    - Southeast Asia average post-crisis domestic debt increase between end of t+1 and t+4: 19 percentage points of GDP.
    - Country specifics: Indonesia +23 percentage points; Korea +22 percentage points; Thailand +20 percentage points; Philippines +10 percentage points.
    - Non-Asian crisis cases: average post-crisis domestic debt ratio increased by 1 percentage point of GDP.
- Decline in external debt-to-GDP post-crisis aided by exchange rate recovery and, in some cases, early repayment of crisis-related external borrowing.

### Changes in structure of sovereign debt: external public debt and creditor composition
- Crisis resolution generally involved increased recourse to official financing, notably multilaterals (IMF), changing creditor composition and increasing share of senior debt.
- All sample countries received multilateral financing during their crises.
  - Exposure to multilateral institutions increased on average by 4.3 percentage points of pre-crisis GDP in the two years following crisis onset.
  - Cross-country variation in emergency financing:
    - Turkey: change in multilateral debt = 17 percentage points of pre-crisis GDP.
    - Uruguay: change = 9 percentage points.
    - Korea and Indonesia: about 5 percentage points.
    - Russia: about 0.9 percentage points.
- IMF role: IMF claims as a share of claims of all multilateral creditors increased rapidly for most sample countries.
- Other multilaterals increased U.S. dollar exposure:
  - World Bank increased exposure by more than 50 percent between t–1 and t+1 for Korea and Ukraine.
  - Regional Development Banks more than doubled lending relative to pre-crisis period in Brazil, Korea, Thailand.
- Multilateral debt as share of total (medium- and long-term) external public debt:
  - Rose on average by 9 percentage points through the crisis year, from about 24 percent to 33 percent, and remained about that level subsequently.
- Bilateral and private sector creditors typically maintained exposure at time of crisis in most cases.

### Box 1 — Did the Relative Importance of Multilateral Lending Increase Over Time? (key findings)
- Cross-country average increase in multilateral exposure between t–1 and t+1: 4.3 percent of pre-crisis GDP.
- Two recent cases exceeding the average: Turkey (2001) and Uruguay (2002).
- Two recent cases without “unusual” multilateral assistance: Ecuador (1999) and Argentina (2001).
- Subgroup (Argentina, Brazil, Korea, Turkey, Uruguay): average increase in multilateral share in total external sovereign debt ≈ 18 percentage points between t–1 and t+1; remaining countries averaged 3 percentage points.
  - Within subgroup: Brazil and Korea started from a very low base; Argentina, Turkey, Uruguay already had substantial exposure.
  - Largest percentage-point increase observed for Korea (1997).
- Official bilateral exposure in U.S. dollar terms increased on average by 11 percent over two years following crisis onset (bilateral increases important in earlier crises 1995–1998: Indonesia, Korea, Philippines, Thailand, Ukraine; exception: Argentina 2001).
- Private sector exposure in U.S. dollar terms:
  - Either remained unchanged or increased at time of crisis.
  - Grew between end of t–1 and t+1 in all cases except Argentina and Ecuador.
  - Grew in Korea, Indonesia, Thailand in part due to rollover agreements converting short-term interbank debt into longer-term government-guaranteed bonds.
  - Strongest average increase in U.S. dollar exposure at t+2 heavily influenced by Korea (plus 252 percent) and Argentina (plus 33 percent).
- Market reaccess:
  - Private sector positions were temporarily unwound in majority of cases when crises abated.
  - Market exclusion spells ranged from several months to five years and more.
  - By end of t+4, external private sector claims exceeded pre-crisis exposure by at least 30 percent for Mexico, Philippines, Turkey; private exposure to Argentina and Ecuador fell by >25 percent (Argentina calculation based on t+3); others broadly at pre-crisis levels at t+4.
- Risks and trade-offs:
  - Large increase in multilateral debt weight may heighten post-crisis vulnerability if combined with very high and rising debt levels.
  - External debt-to-GDP ratio guidance: should not exceed 35 percent to be considered “safe” for most emerging market countries (as referenced).
  - High share of senior multilateral debt can complicate creditor agreement on private-sector debt relief in severe deterioration cases.
  - If liquidity (not solvency) problem, multilateral assistance (longer maturities, favorable terms) should typically reduce vulnerability.
- Empirical ambiguity on trend:
  - Size of multilateral packages over time: mixed evidence.
  - Share of multilateral exposure relative to other creditors: some recent cases (Turkey, Uruguay) show stronger rise; single largest increase was Korea (1997).

### Country examples and notable figures (from Box 1)
- Argentina:
  - Creditor participation in Argentine debt offer: creditors representing 24 percent of eligible claims did not participate (as of February 25, 2005).
  - Argentina fully retired outstanding IMF debt of US$9.5 billion (5.3 percent of GDP) in January 2006, reducing multilateral liabilities to about 10 percent of GDP.
- Uruguay:
  - Multilateral claims at end-2005 > 32 percent of GDP.
  - 2003 bond exchange was well received and did little to affect debt-to-GDP ratio.
- Ecuador:
  - Multilateral debt represented 12 percent of GDP at end-2005 (mostly owed to World Bank and Regional Development Banks).
  - Experienced longer market exclusion after restructuring; reaccessed international markets in fifth post-crisis year.
- Korea:
  - Largest increase in multilateral share among sample; plus 252 percent increase in U.S. dollar exposure at t+2.
  - Authorities rolled over short-term interbank debts into one- to three-year government-guaranteed bonds.
- Indonesia and Ukraine:
  - Sovereign reaccessed international markets only in the fifth and sixth post-crisis year, respectively.

### Domestic public debt and banking sector exposure
- Banking sector claims on public sector (deposit bank claims on central government, except Russia and Ukraine [general government], and Turkey [government]) in percent of GDP:
  - Argentina: t–1 = 7; t+1 = 26; t+3 = 23
  - Brazil: t–1 = 11; t+1 = 12; t+3 = 17
  - Indonesia: t–1 = 1; t+1 = 25; t+3 = 29
  - Korea: t–1 = 1; t+1 = 3; t+3 = 4
  - Mexico: t–1 = 7; t+1 = 7; t+3 = 16
  - Philippines: t–1 = 13; t+1 = 11; t+3 = 15
  - Russia: t–1 = 9; t+1 = 10; t+3 = 7
  - Turkey: t–1 = 28; t+1 = 29; t+3 = 26
  - Thailand: t–1 = 0; t+1 = 3; t+3 = 6
  - Uruguay: t–1 = 5; t+1 = 9; t+3 = 6
- Net fiscal/financial sector restructuring costs (available cases: Ecuador, Indonesia, Korea, Mexico, Thailand, Turkey): estimates range between 19 percent and 52 percent of GDP and include liquidity assistance, government guarantees, bank recapitalization.
- Increased domestic bank holdings of sovereign paper can make domestic public debt more rigid, particularly where bank exposure exceeds 15 percent of GDP in the post-crisis period (noted for Argentina, Brazil, Indonesia, Mexico, Turkey at t+3).

### Banking sector exposure, sovereign restructuring, and tradeoffs
- High bank exposure to sovereign can create a tradeoff between restoring debt sustainability and preserving banking system soundness when the banking system is weakened.
- Intensity of tradeoff depends on state of banking sector, its exposure relative to other creditors, and required haircut size.
- Case evidence:
  - Argentina: voluntary restructuring November 2001 restructured most liabilities to domestic banking sector, excluding about 85 percent of banking sector’s sovereign exposure from sovereign default one month later. Policy responses caused banks large losses and issuance of US$21 billion in sovereign debt to banking sector; banking sector exposure to sovereign increased to 55 percent of assets by end-2004.
  - Uruguay: domestic banks’ voluntary participation in 2003 debt exchange facilitated by menu of instruments avoiding principal haircut.
- Cross-case example: claims of banks on central government as share of total assets increased to 58 percent and 53 percent at end of t+1 from 20 percent and 17 percent at end of t–1 (examples: Argentina, Indonesia).

### Maturity and currency composition of domestic public debt
- No clear cross-country trend in domestic debt maturities around crises.
- Maturity evidence:
  - Most countries showed little change in maturity composition pre-crisis.
  - Uruguay (of five countries with data) showed modest pre-crisis growth in short maturities.
  - After crisis, 3 of 5 countries experienced substantial increase in short-term debt; Turkey’s share of short maturities tripled through end of crisis year (rise by 13 percentage points).
  - Mexico temporarily reduced short-term share then reverted to pre-crisis levels by second year after 1997 crisis.
  - Indonesia avoided short-term exposure throughout its crisis episode.
  - Persistence of short-term debt suggests investors unwilling to accept lengthening maturities at sovereign-acceptable costs.
- Currency composition evidence:
  - Greater use of foreign currency–denominated debt in run-up to crises.
  - Mexico: swaps of peso-denominated treasury bills for tesobonos indexed to U.S. dollar to reduce funding costs and support exchange rate peg.
  - Rise in foreign currency liabilities in total domestic public debt observed for Brazil, Turkey, Uruguay.
  - Post-crisis reductions in foreign currency reliance were limited:
    - Mexico: tesobonos fully retired by end-1995, eliminating foreign currency component in domestic borrowing.
    - Uruguay: marginal reduction but at expense of extremely high interest rates.
    - Brazil, Indonesia, Turkey: increased foreign currency issuances to retain market access post-crisis.
- Combined maturity and currency risk:
  - No case succeeded in reducing both maturity and currency risks simultaneously.
  - Under high investor uncertainty, countries often relied on short-term and/or foreign currency debt to induce private sector to hold sovereign paper.

### Stylized findings and conclusions on debt dynamics through crises
- Crises associated with weaker sovereign debt profiles and increased public sector vulnerability.
- Debt level impacts:
  - Gross (net) public debt-to-GDP rose on average by 36 (32) percentage points within two years of crisis onset.
  - Increase in debt levels tended to persist for several years in most countries.
  - Only Ecuador, Mexico, Russia fully rolled back crisis-induced increases within three years; Ecuador and Russia benefited from debt restructuring and favorable terms of trade.
  - Rise in (net) debt-to-GDP typically driven more by domestic than external debt; new domestic borrowing often linked to financial sector restructuring (especially in Asian crisis countries).
- Debt structure and rigidity:
  - Crises associated with increases in sovereign liabilities that can raise rigidity:
    - higher share of multilateral claims in total public debt due to financial assistance,
    - heightened exposure of weak domestic banking sector to government debt from banking-sector resolution efforts.
  - Little evidence that debt rigidity was a persistent source of significant vulnerability:
    - In 6 of 12 countries, rigid liabilities exceeded 20 percent of GDP at end of first post-crisis year, but these countries reduced debt levels subsequently.
    - The six countries and rigid liabilities to GDP ratios (rigid liabilities = multilateral claims + domestic banking sector claims) at end of first post-crisis year: Uruguay (58), Argentina (56), Indonesia (46), Turkey (46), Ecuador (29), Philippines (23).
- Policy challenge: improving sovereign debt composition during heightened uncertainty is difficult; reducing both maturity and currency risks simultaneously was not observed in reviewed cases.

### Policy-relevant considerations and implications
- Multilateral financing can restore confidence and enable private-market reaccess when supporting credible adjustment programs; multilateral exposure is often unwound over time.
- High shares of senior multilateral debt and elevated total debt levels (e.g., >80 percent of GDP at end of t+1 in some cases) can raise post-crisis vulnerability concerns and complicate private creditor participation in restructuring.
- Investor-base structure matters:
  - Shift from bank creditors to bondholders can hinder rollovers or coordinated creditor responses due to collective action problems and lower long-term commitment by bondholders.
  - Banks’ reduced appetite for risk (post-September 11, heightened OECD credit risk, deteriorating bank balance sheets) may have weakened their role as committed sovereign creditors.
- Monitor domestic banking sector exposure: strong bank financial conditions can absorb increased sovereign paper, but elevated holdings can increase debt rigidity and fiscal risk if banks are fragile.

*Source: _wp06186 — selected sections and Box 1 from the provided IMF working paper content.*

### 1. Did the Relative Importance of Multilateral Lending Increase Over Time? .......................14

### 1. Did the Relative Importance of Multilateral Lending Increase Over Time? .......................14

### Background and motivation
- Rapid international integration of capital markets provides emerging market countries (EMCs) with considerable opportunities for investment-led growth while exposing them to sudden shifts in market sentiment and the risk of financial crises.
- Resolution of these crises has typically involved the provision of sizable financial assistance by the official community in support of economic adjustment programs aimed at easing liquidity pressures and restoring confidence.
- Countries may emerge from a financial crisis with increased debt-related vulnerabilities that leave them exposed to the risk of recurrent distress.

### Conceptual channels for increased debt-related vulnerabilities during and after crises
- Debt levels relative to repayment capacity may increase because of:
  - sharp depreciation of the exchange rate,
  - an increase in real interest rates,
  - a contraction in output.
- Debt burden may increase as a result of new borrowing from external and domestic sources during crisis resolution.
- Post-crisis vulnerabilities can stem from crisis-induced changes in the composition of sovereign debt, including:
  - maturity composition,
  - currency composition,
  - changes in the creditor base that increase the debt’s rigidity.

### Research focus and questions
- The paper examines stylized facts regarding changes in the level and structure of sovereign debt for 12 emerging market economies that experienced a major financial crisis in recent years.
- Key questions:
  - How did public debt levels evolve over the crisis cycle, and what was the contribution of the domestic and external components to overall debt dynamics?
  - Did efforts aimed at crisis resolution result in a more rigid external debt structure, defined as a higher share of senior multilateral claims in total public debt that are less amenable to (or need to be excluded from) a restructuring?
  - In which situations could such a shift in debt structure contribute significantly to post-crisis vulnerability?
  - Is there evidence that domestically issued public debt also became more rigid in the aftermath of crises, owing in particular to an increase in the exposure of the financial sector to such debt?
  - How did the maturity and currency composition of domestic public debt change throughout the crisis cycle?

### Sample, definitions, and data notes
- Sample includes: Argentina, Brazil, Ecuador, Indonesia, Korea, Mexico, Philippines, Russia, Thailand, Turkey, Ukraine, and Uruguay.
- External and domestic debt defined as the claims of nonresidents and residents, respectively, on the public sector (definition follows the World Bank’s Global Development Finance, one of the main data sources for this study).
- The de facto seniority of multilateral claims—or the preferred creditor status of multilateral financial institutions relative to other creditors—helps insulate these institutions from the risk of nonpayment and debt restructuring and enables them to take on risks in the general public’s interest in crisis situations when other creditors are unwilling to provide financing.

### Paper organization
- Section II examines the evolution of public debt levels for the 12 countries over the crisis cycle.
- Section III discusses changes in the structure of sovereign debt during a crisis and its aftermath, focusing on both external and domestic components.

*Source: _wp06186 - 1. Did the Relative Importance of Multilateral Lending Increase Over Time? .......................14*

### Section IV concludes.

### _wp06186 - Section IV concludes.

### Evolution of sovereign debt levels: immediate post-crisis dynamics
- Gross public debt as a share of GDP increased on average by 36 percentage points from the year prior to the crisis (t–1) to the year following the crisis (t+1).
- Net public debt (gross debt adjusted for international reserve holdings of the central bank) increased on average by about 32 percentage points over the same two-year horizon.
- Pre-crisis and post-crisis averages (from Figure 1):
  - Gross debt: Pre-crisis (t–1) average: 44% ; Post-crisis (t+1) average: 80%
  - Net debt: Pre-crisis (t–1) average: 36% ; Post-crisis (t+1) average: 68%
- In some countries (particularly in Asia) growth in gross sovereign debt was associated with increases in central banks’ international reserves (examples between t–1 and t+1: Indonesia +11 percentage points of GDP; Korea +9 percentage points; Philippines +8 percentage points; Thailand +6 percentage points).
- Cross-country heterogeneity:
  - Argentina, Indonesia, and Uruguay: net debt-to-GDP ratio rose by more than half the size of GDP over the two-year period.
  - Mexico: ratio declined from 41 percent of GDP in t–1 to 36 percent in t+1.

- Decomposition of change in net debt-to-GDP (Table 1; contributions are percent of GDP from end of t–1 to end of t+1):
  - Country-level changes in public debt-to-GDP ratio and contributors (change | primary balance | real interest rate | real GDP growth | exchange rate depreciation | residual):
    - Argentina (2001): 88.5 | –1.1 | 3.2 | 6.2 | 63.4 | 16.7
    - Brazil (1998): 30.5 | –3.2 | 19.0 | –0.5 | 16.8 | –1.6
    - Ecuador (1999): 16.9 | –11.1 | –60.5 | 1.2 | 90.7 | –3.3
    - Indonesia (1998): 59.5 | –3.3 | –5.8 | –0.1 | 22.1 | 46.7
    - Korea (1997): 18.7 | 4.7 | 0.5 | 0.7 | 2.2 | 10.7
    - Mexico (1995): –5.2 | –14.7 | 5.4 | 0.2 | 38.3 | –34.3
    - Philippines (1998): 8.5 | –2.3 | –1.3 | –2.1 | 10.6 | 3.5
    - Russia (1998): 28.5 | 0.7 | –27.5 | –0.1 | 79.5 | –24
    - Thailand (1997): 25.7 | 4.2 | –0.4 | 0.6 | 0.7 | 20.5
    - Turkey (2001): 36.9 | –9.6 | –7.3 | –1.7 | 42.9 | 12.6
    - Ukraine (1998): 22.4 | 0.2 | –6.6 | 0.5 | 15.7 | 12.6
    - Uruguay (2002): 54.3 | –3.4 | –9.3 | 2.4 | 54.2 | 10.3
  - Average contributions (from t–1 to t+1):
    - Change in public debt-to-GDP ratio: 32.1
    - Primary balance: –3.2
    - Real interest rate: –7.6
    - Real GDP growth: 0.6
    - Exchange rate depreciation: 36.4
    - Residual: 5.9
- Key drivers:
  - Nominal exchange rate depreciation typically contributed most to worsening the debt situation (average contribution: 36.4 percentage points).
  - Crisis-induced new borrowing (to fund primary deficits and financial sector restructuring) and changes in real interest rates also affected debt dynamics.
  - Output growth impact on debt dynamics was limited except in Argentina and Uruguay where deep recessions contributed significantly to rising debt ratios.
  - In some cases fiscal consolidation helped contain debt dynamics (notably Ecuador, Mexico, Turkey); in Korea and Thailand fiscal expansion raised debt-to-GDP.

### Evidence on debt reversals (first three post-crisis years)
- Post-crisis outcomes varied; adjustment programs combining fiscal consolidation, structural reforms, and prudent monetary policy did not always lead to significant debt reductions within three years.
- Debt reversals and examples:
  - Debt-to-GDP returned to or below pre-crisis levels within three years: Ecuador, Mexico, Russia (debt restructurings contributed: Ecuador decline of 13 percentage points in 2000; Russia decline of 32 percentage points in 2000).
  - Korea, the Philippines, Ukraine: broadly neutralized the crisis impact on sovereign debt by end of third post-crisis year, though not fully back to pre-crisis levels.
  - Persistent elevated debt (~30 percentage points above pre-crisis) at end of t+3 (t+2 for Turkey and Uruguay): Brazil, Thailand, Turkey, Uruguay. Turkey and Uruguay exhibited declining trends; Brazil and Thailand continued to see growth in t+2 and t+3.
  - Extreme persistence (>50 percentage points above pre-crisis at t+3): Argentina, Indonesia. Notes:
    - Argentina: net sovereign debt-to-GDP declined sharply after debt exchange with external private creditors in 2005 and early repayment of IMF credit in January 2006.
    - Indonesia: debt ratio reduced by 22 percentage points of GDP between t+3 and t+5 but remained high at 49 percent of GDP at end-2003.
- Post-crisis debt evolution appears generally unrelated to pre-crisis debt levels.

### External debt versus domestic debt: composition and timing
- Over a seven-year span beginning two years prior to the crisis: domestic debt increased on average by 16 percentage points of GDP; external debt (net of financing used to build international reserves) contributed only 10 percentage points to overall debt-to-GDP growth over the same horizon.
- Stage-dependent patterns (Figure 3):
  - Run-up to the crisis (t–2 and t–1): domestic debt grew faster than external debt on average. Strongest in Brazil, Mexico, Uruguay where domestic debt in year prior to crisis increased by more than 8 percentage points of GDP while external public debt remained broadly constant. Driving factor: absorption of sovereign debt by the domestic financial system amid falling investor confidence and loss of access to international capital markets.
  - Crisis (t): external public debt typically dominated overall debt dynamics; external public debt as a share of GDP rose sharply while domestic debt increases were modest—main driver: exchange rate depreciation effect given weight of foreign currency–denominated external debt and recourse to emergency multilateral support.
  - Aftermath (t+1 through t+4): domestic debt share typically continued to rise while external debt share declined. Pattern pronounced in Southeast Asia, where issuance of domestic debt was linked to financial sector restructuring (Asian sample average: domestic debt ratios increased by 19 percentage points of GDP between end of year t+1 and t+4; country specifics: Indonesia +23 percentage points post-crisis, Korea +22 percentage points, Thailand +20 percentage points, Philippines +10 percentage points). In non-Asian crisis cases, average post-crisis domestic debt ratio increased by 1 percentage point of GDP.
- Decline in external debt-to-GDP ratios after crisis facilitated by exchange rate recovery and, in some cases, early repayment of crisis-related external borrowing due to balance of payments improvements.

### Changes in the structure of sovereign debt: external public debt and creditor composition
- Crisis resolution generally involved increased recourse to official financing, notably multilaterals (IMF), changing creditor composition and increasing the share of senior debt.
- All sample countries received multilateral financing during their crises.
  - Exposure to multilateral institutions increased on average by 4.3 percentage points of pre-crisis GDP in the two years following crisis onset.
  - Cross-country variation in emergency financing size was large:
    - Turkey: change in multilateral debt = 17 percentage points of pre-crisis GDP.
    - Uruguay: change = 9 percentage points of pre-crisis GDP.
    - Korea and Indonesia: about 5 percentage points of pre-crisis GDP.
    - Russia: about 0.9 percentage points of pre-crisis GDP.
- IMF role and multilateral composition:
  - IMF was the main source of balance of payments assistance; IMF claims as a share of claims of all multilateral creditors increased rapidly for most sample countries.
  - Other multilaterals’ U.S. dollar exposure also increased. Examples:
    - The World Bank increased its exposure by more than 50 percent between t–1 and t+1 in the cases of Korea and Ukraine.
    - Regional Development Banks more than doubled their lending relative to pre-crisis period in Brazil, Korea, and Thailand.
- Effect on seniority and composition:
  - Multilateral debt as a share of total (medium- and long-term) external public debt rose on average by 9 percentage points through the crisis year, from about 24 percent to 33 percent, and remained at about that level through subsequent years.
  - Despite the rise in multilateral financing, bilateral and private sector creditors typically maintained their exposure to the sovereign at the time of the financial crisis in most country cases.

*Italic: Source: _wp06186 - Section IV concludes.*

### Box 1 discussing the relative importance of multilateral lending over time).

### Box 1. Did the Relative Importance of Multilateral Lending Increase Over Time?

### Evidence on multilateral lending patterns and timing
- Cross-country average increase in multilateral exposure between t–1 and t+1: 4.3 percent of pre-crisis GDP.
- Two recent crisis cases with multilateral exposure increases exceeding the cross-country average: Turkey (2001) and Uruguay (2002).
- Two recent crisis cases without “unusual” multilateral assistance: Ecuador (1999) and Argentina (2001).
- A subgroup of five countries (Argentina, Brazil, Korea, Turkey, and Uruguay) experienced an average increase in the share of multilateral debt in total external sovereign debt of about 18 percentage points between t–1 and t+1; the remaining countries averaged 3 percentage points.
  - Within that subgroup, Brazil and Korea started from a very low base; Argentina, Turkey, and Uruguay already had substantial exposure to multilateral institutions.
- The largest percentage-point increase in the multilateral share by country was observed for Korea (crisis in 1997).

### Creditor composition and emergency official financing
- In U.S. dollar terms, official bilateral exposure increased, on average, by 11 percent over the two years following the onset of a crisis, highlighting the role of official creditors in crisis resolution.
  - Bilateral increases were particularly important in earlier crisis cases between 1995 and 1998: Indonesia, Korea, Philippines, Thailand, and Ukraine (exception: Argentina 2001).
- Private sector exposure to the sovereign in U.S. dollar terms typically:
  - Either remained unchanged at pre-crisis levels or increased at the time of crisis.
  - Grew between the end of t–1 and t+1 in all cases except Argentina and Ecuador.
  - Grew in Korea, Indonesia, and Thailand in part due to rollover agreements with international banks (conversion of short-term interbank debt into longer-term government-guaranteed bonds in Korea; similar, less successful scheme in Indonesia).
- The strongest average increase in U.S. dollar exposure is observed at t+2, but this is heavily influenced by large increases in Korea (plus 252 percent) and Argentina (plus 33 percent).

### Outcomes for private sector exposure and market reaccess
- When crises abated, private sector positions were temporarily unwound in the majority of cases, even where maintenance-of-exposure mechanisms were implemented.
- Market exclusion spells ranged from several months to five years and more.
- Over the longer term, countries emerging from crises typically regained access to private sector flows, largely owing to credible adjustment programs supported by official financing.
  - Examples: external private sector claims at end of t+4 exceeded pre-crisis exposure by at least 30 percent for Mexico, Philippines, and Turkey; private exposure to Argentina and Ecuador fell by more than 25 percent (Argentina calculation based on t+3); others were broadly at pre-crisis levels at t+4.

### Risks and trade-offs associated with a larger multilateral share
- A large increase in the weight of multilateral debt may heighten post-crisis vulnerability if it is associated with very high and rising debt levels.
  - Debt sustainability guidance referenced: external debt-to-GDP ratio should not exceed 35 percent to be considered “safe” for most emerging market countries (Reinhart and others, 2003; IMF 2003).
- Most adjustment programs supported by multilateral financing have been successful in restoring confidence and helping crisis countries progress toward debt sustainability.
- In rare cases where sovereign debt deteriorates severely, a high share of senior multilateral debt may complicate creditor agreement on private-sector debt relief:
  - All else equal, the higher the share of multilateral debt in total debt and the deeper the present-value reduction of private claims sought, the more reluctant private creditors may be to participate in debt operations.
- If liquidity pressures (but not solvency) are the main problem, multilateral assistance—with longer maturities and more favorable terms—should typically reduce vulnerability by improving maturity profile and lowering debt service costs.

### Empirical ambiguity on whether multilateral lending increased over time
- First question (did size of multilateral financing packages increase over time?): evidence is mixed — some recent cases show larger multilateral assistance than the cross-country average, others do not.
- Second question (did the share of multilateral exposure increase relative to other creditors?): in some recent cases (Turkey, Uruguay) the multilateral share rose more strongly than in most earlier crises; however, the single largest increase was in Korea (1997), an earlier episode.

### Country examples and notable figures
- Argentina:
  - Exception to bilateral emergency financing pattern in 2001.
  - Creditor participation in Argentine debt offer: creditors representing 24 percent of eligible claims did not participate (as of February 25, 2005).
  - Argentina fully retired outstanding IMF debt of US$9.5 billion (5.3 percent of GDP) in January 2006, reducing multilateral liabilities to about 10 percent of GDP.
- Uruguay:
  - Multilateral claims at end-2005 still amounted to more than 32 percent of GDP.
  - 2003 bond exchange well received by investors and did little to affect debt-to-GDP ratio.
- Ecuador:
  - Multilateral debt represented 12 percent of GDP at end-2005 (mostly owed to World Bank and Regional Development Banks).
  - Experienced longer market exclusion following restructuring; sovereign reaccessed international markets in the fifth post-crisis year.
- Korea:
  - Notable for the largest increase in multilateral share among sample countries; experienced a plus 252 percent increase in U.S. dollar exposure at t+2.
  - Authorities rolled over short-term interbank debts into one- to three-year government-guaranteed bonds.
- Indonesia and Ukraine:
  - Sovereign reaccessed international markets only in the fifth and sixth post-crisis year, respectively.

### Domestic public debt and banking sector exposure
- Domestic banking sector claims on public sector (deposit bank claims on central government, except Russia and Ukraine [general government], and Turkey [government]) in percent of GDP:
  - Argentina: t–1 = 7; t+1 = 26; t+3 = 23
  - Brazil: t–1 = 11; t+1 = 12; t+3 = 17
  - Indonesia: t–1 = 1; t+1 = 25; t+3 = 29
  - Korea: t–1 = 1; t+1 = 3; t+3 = 4
  - Mexico: t–1 = 7; t+1 = 7; t+3 = 16
  - Philippines: t–1 = 13; t+1 = 11; t+3 = 15
  - Russia: t–1 = 9; t+1 = 10; t+3 = 7
  - Turkey: t–1 = 28; t+1 = 29; t+3 = 26
  - Thailand: t–1 = 0; t+1 = 3; t+3 = 6
  - Uruguay: t–1 = 5; t+1 = 9; t+3 = 6
- Net fiscal/financial sector restructuring costs (available cases: Ecuador, Indonesia, Korea, Mexico, Thailand, Turkey): estimates range between 19 percent and 52 percent of GDP and include liquidity assistance, government guarantees, and bank recapitalization.
- Increased domestic bank holdings of sovereign paper can make domestic public debt more rigid, particularly where bank exposure exceeds 15 percent of GDP in the post-crisis period (noted for Argentina, Brazil, Indonesia, Mexico, Turkey at t+3).

### Implications and policy-relevant considerations
- Multilateral financing can be effective in restoring confidence and enabling reaccess to private markets when used to support credible adjustment programs; it often helps sovereigns unwind multilateral exposure over time.
- High shares of senior multilateral debt and elevated total debt levels (e.g., >80 percent of GDP at end of t+1 in some cases) can raise concerns about post-crisis vulnerability and complicate private creditor participation in restructuring.
- The structure of the investor base matters:
  - A shift from bank creditors to bondholders can make it more difficult to sustain rollovers or coordinated creditor responses due to collective action problems and lower long-term commitment by bondholders.
  - Banks’ reduced appetite for risk (post-September 11, heightened OECD credit risk, deteriorating bank balance sheets) may have weakened their role as committed sovereign creditors over time.
- Domestic banking sector exposure to the sovereign should be monitored: while strong bank financial conditions can absorb increased sovereign paper without major concern, elevated bank holdings can increase debt rigidity and potential fiscal risk if banks are fragile.

*Italic: Source — Box 1, “Did the Relative Importance of Multilateral Lending Increase Over Time?”, from the provided IMF working paper content.*

### Section II.C).

### _wp06186 - Section II.C)

### Banking sector exposure, sovereign restructuring, and tradeoffs
- When the banking system is weakened by crisis dynamics and claims on the government represent a high share of total bank assets, the stability of the sector may become closely tied to continued performance of public sector assets.
- A high bank exposure to the sovereign—which is often encouraged by regulatory frameworks that consider such claims to be riskless assets—can coincide with an unsustainable sovereign debt level requiring debt restructuring, creating a tradeoff between:
  - restoring a viable debt and debt-service profile, and
  - preserving the soundness of the banking system.
- The intensity of the tradeoff depends on:
  - the state of the banking sector,
  - its exposure to the sovereign relative to other creditor groups, and
  - the required size of the haircut to restore debt sustainability.
- Case evidence and policy responses:
  - Argentina: a voluntary restructuring in November 2001 restructured most liabilities to the domestic banking sector, providing the basis for excluding about 85 percent of the banking sector’s total sovereign exposure from the sovereign default one month later. Despite NPV loss due to coupon reduction and maturity extension, the restructured debt continued to be serviced and government debt was not marked to market. Banks, however, incurred large losses from the policy response to the economic crisis—including the asymmetric pesoization of banks’ assets and liabilities and the impact of judicial injunctions—which led to the issuance of US$21 billion in sovereign debt to the banking sector. As a consequence, banking sector exposure to the sovereign increased to 55 percent of assets by end-2004.
  - Uruguay: domestic banks’ voluntary participation in the 2003 debt exchange was facilitated by a menu of instruments designed to meet their needs to avoid a principal haircut.
- Cross-case data example: claims of banks on the central government as a share of their total assets increased to 58 percent and 53 percent at the end of t+1, respectively, from 20 percent and 17 percent at the end of t–1 (examples cited: Argentina and Indonesia).

### Maturity and currency composition of domestic public debt
- No clear cross-country trend in evolution of domestic public debt maturities in crises.
- Evidence on maturity composition:
  - Available evidence suggests the maturity composition of domestic debt did not change significantly for most countries in the run-up to crises.
  - Uruguay is the only case out of the five countries with data (Indonesia, Mexico, Thailand, Turkey, and Uruguay) showing a modest growth in the share of short maturities pre-crisis.
  - After the crisis, three out of five countries experienced a substantial increase in short-term debt. Example: Turkey’s share of short maturities tripled through the end of the crisis year, representing a rise by 13 percentage points.
  - Mexico temporarily reduced the share of short-term debt before reverting to broadly pre-crisis levels in the second year after the crisis (1997).
  - Indonesia avoided short-term exposure throughout the crisis episode.
  - The persistence of growing short-term debt beyond the event suggests investors were often unwilling to accept lengthening maturities at costs acceptable to the sovereign.
- Evidence on currency composition:
  - Governments typically made greater use of foreign currency-denominated debt in the run-up to crises.
  - Mexico: large swaps of peso-denominated treasury bills for tesobonos indexed to the U.S. dollar to reduce funding costs and underscore commitment to the exchange rate peg.
  - A rise in the share of foreign currency liabilities in total domestic public debt observed for Brazil, Turkey, and Uruguay.
  - Post-crisis, only a minority of countries reduced reliance on foreign currency debt:
    - Mexico: the tesobonos were fully retired by the end of 1995, effectively eliminating the foreign currency component in domestic borrowing.
    - Uruguay: marginal reduction in dependence on foreign currency debt, but at the expense of extremely high interest rates.
    - Brazil, Indonesia, and Turkey: increased foreign currency issuances to retain market access following the crisis.
- Combined maturity and currency risk:
  - Countries generally faced significant difficulties in reducing exposure to maturity or currency risk after a crisis.
  - In no case did a sovereign succeed in reducing both risks at the same time.
  - In situations with high investor uncertainty, countries may often have no choice but to rely on short-term and/or foreign currency-denominated debt to induce the private sector to hold sovereign paper.

### Stylized findings and conclusions on debt dynamics through crises
- Crises were associated with weaker sovereign debt profiles and often increased public sector vulnerability.
- Debt level impacts:
  - Crises typically cause an increase in public sector debt ratios, driven in particular by severe exchange rate depreciations.
  - Specifically, the debt-to-GDP ratio for gross (net) public debt increased on average by 36 (32) percentage points within two years from the onset of the crisis.
  - For most countries, the increase in debt levels persisted for several years.
  - Only three out of the twelve countries in the sample (Ecuador, Mexico, and Russia) fully rolled back the crisis-induced increase in their debt-to-GDP ratios within the three-year horizon examined; all benefited from favorable terms of trade trends, and Ecuador and Russia also benefited from a debt restructuring.
  - Typically, the rise in (net) debt-to-GDP ratios over the crisis cycle was driven more by domestic rather than external debt. New domestic borrowing in crisis resolution was often linked to financial sector restructuring, particularly in the Asian crisis countries.
- Debt structure and rigidity:
  - Financial crises were associated with increases in sovereign liabilities that could contribute to greater rigidity of the debt structure:
    - an increase in the share of multilateral claims in total public debt associated with financial assistance needed to resolve the crisis; and
    - heightened exposure of a weak domestic banking sector to government debt as a consequence of efforts to resolve banking sector problems.
  - Little evidence that debt rigidity represented a persistent source of significant vulnerability:
    - In 6 of the 12 countries in the sample, rigid liabilities exceeded 20 percent of GDP at the end of the first post-crisis year, but these countries were successful in reducing debt levels soon thereafter, aiding progress toward debt sustainability.
    - The six countries and their rigid liabilities to GDP ratios (rigid liabilities defined as sum of public debt owed to multilateral institutions and the domestic banking sector): Uruguay (58), Argentina (56), Indonesia (46), Turkey (46), Ecuador (29), and the Philippines (23).
- Overall: improving the composition of sovereign debt at times of heightened uncertainty is a serious challenge for policymakers; reducing both maturity and currency risks simultaneously has not been observed in the cases reviewed.

### Data, sample, and methodology notes (summary)
- Crisis year selection used qualitative assessments and available case studies rather than a single quantitative index; results are not very sensitive to crisis-date changes because analyses typically span end of last pre-crisis year through end of first post-crisis year, sometimes expanded further.
- Country sample comprises capital account crises cases in Ghosh and others (2002), augmented by Argentina, Turkey, Uruguay, Russia, and Ukraine.
- Data sources:
  - External debt: World Bank Global Development Finance CD-ROM (2003), updated with IMF country economists.
  - Domestic public debt: country desk submissions, Fiscal Affairs Department debt database, and national sources.
  - GDP and exchange rates: World Economic Outlook (WEO) database.
  - Banking sector data: IMF’s International Financial Statistics.
  - Decomposition of debt-to-GDP increases used IMF Article IV staff report macro data where available; missing data filled with WEO.
- Crisis years (t) used in the study:
  - Argentina 2001
  - Brazil 1998
  - Ecuador 1999
  - Indonesia 1998
  - Korea 1997
  - Mexico 1995
  - Philippines 1998
  - Russia 1998
  - Thailand 1997
  - Turkey 2001
  - Ukraine 1998
  - Uruguay 2002

*Source: _wp06186 - Section II.C).*

### References

### _wp06186 - References

### Listed references

- Barajas, Adolfo, Emiliano Basco, V. Hugo Juan-Ramon, and Carlos Quarracino, 2006, “Banks During the Argentine Crisis: Were They All Hurt Equally? Did They All Behave Equally?” IMF Working Paper 06/42 (Washington: International Monetary Fund.  
- Bordo, Michael, and others, 2004, “Keeping Capital Flowing: The Role of the IMF,” IMF Working Paper 04/197 (Washington: International Monetary Fund).  
- Borensztein, Eduardo, and others, 2004, Sovereign Debt Structure for Crisis Prevention, IMF Occasional Paper No. 237 (Washington: International Monetary Fund). 
- Caprio, Gerard, and Daniela Klingebiel, 2003, “Episodes of Systemic and Borderline Financial Crises” (unpublished; Washington: World Bank). 
- Collyns, Charles, and G. Russell Kincaid, eds., 2003, Managing Financial Crises: Recent Experience and Lessons for Latin America, IMF Occasional Paper No. 217 (Washington: International Monetary Fund). 
- Eichengreen, Barry, and others, 2005, “The IMF in a World of Private Capital Market,” IMF Working Paper 05/84 (Washington: International Monetary Fund).  
- European Central Bank, 2005, Managing Financial Crises in Emerging Market Economies – Experience with the Involvement of Private Sector Creditors (Frankfurt: European Central Bank).  
- Frankel, Jeffrey, and Shang-Jin Wei, 2004, “Managing Macroeconomic Crises: Policy Lessons” (unpublished; Washington: World Bank). 
- Gelpern, Anna, 2005, “After Argentina,” Policy Briefs in International Economics PB05–2 (Washington: Institute for International Economics).  
- Ghosh, Atish, and others, 2002, IMF-Supported Programs in Capital Account Crises, IMF Occasional Paper No. 210 (Washington: International Monetary Fund).  
- Goldstein, Morris, 2003, “Debt Sustainability, Brazil, and the IMF,” IIE Working Paper 03–1 (Washington: Institute for International Economics).  
- Hemming, Richard, and others, 2003, Fiscal Vulnerability and Financial Crises in Emerging Market Economies, IMF Occasional Paper No. 218 (Washington: International Monetary Fund).  
- Hoelscher, David S., and Marc Quintyn, 2003, Managing Systemic Banking Crises, IMF Occasional Paper No. 224 (Washington: International Monetary Fund).  
- Honohan, Patrick, and Daniela Klingebiel, 2000, “Controlling Fiscal Costs of Banking Crises” (unpublished; Washington: World Bank). 
- International Monetary and Financial Committee, 2005, Progress Report to the International Monetary and Financial Committee on Crisis Resolution, IMFC/Doc/11/05/4. Available via the Internet: http://www.imf.org/external/np/pp/eng/2005/041205.htm. 
- International Monetary Fund, 2002, Assessing Sustainability, SM/02/166, 2/28/02. Available via the Internet: http://www.imf.org/external/np/pdr/sus/2002/eng/052802.pdf. 
- ——2003, World Economic Outlook, September 2003: Public Debt in Emerging Markets: Is it Too High? World Economic and Financial Surveys (Washington: International Monetary Fund). 
- ——2004, Debt-Related Vulnerabilities and Financial Crises–An Application of the Balance Sheet Approach to Emerging Market Countries, SM/04/210, 7/2/04. Available via the Internet: http://www.imf.org/external/np/pdr/bal/2004/eng/070104.pdf 
- ——2005, Assessing the Determinants and Prospects for the Pace of Market Access By Countries Emerging From Crisis – Further Considerations, SM/05/76, 3/2/05. Available via the Internet: http://www.imf.org/external/np/pp/eng/2005/030105a.pdf
. 
- ——2006, Cross-Country Experience with Restructuring of Sovereign Debt and Restoring Debt Sustainability, SM/06/26, 1/23/06. 
- Kaminsky, Graciela, and Carmen M. Reinhart, 1999, “The Twin Crises: The Causes of Banking and Balance-of-Payments Problems,” American Economic Review, Vol. 89, No. 3, pp. 473–500.  
- Lindgren, Carl-Johan, and others, 1999, Financial Sector Crisis and Restructuring Lessons from Asia, IMF Occasional Paper No.188 (Washington: International Monetary Fund). 
- Mody, Ashoka, 2004, “Is FDI Integrating the World Economy?” World Economy, Vol. 27, No. 8, pp. 1195–1222. 
- Reinhart, Carmen M., Kenneth S. Rogoff, and Miguel A. Savastano, 2003, “Debt Intolerance,” NBER Working Paper No. 9908 (Cambridge, Massachusetts: National Bureau of Economic Research).  
- Reinhart, Carmen M., and Kenneth S. Rogoff, 2004, “Serial Default and the ‘Paradox’ of Rich to Poor Capital Flows,” NBER Working Paper No. 0296 (Cambridge, Massachusetts: National Bureau of Economic Research). 
- Roubini, Nouriel, and Brad Setzer, 2004, Bailouts or Bail-Ins? Responding to Financial Crises in Emerging Markets (Washington: Institute of International Economics). 
- Sturzenegger, Federico, 2003, “Default Episodes in the 90s: Factbook, Toolkit and Preliminary Lessons” (unpublished; Buenos Aires: Universidad Torcuato Di Tella).

*Source: _wp06186 - References (IMF PDF).*

---


_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2006/_wp06186.pdf_