The debt crises in emerging market countries over the past decade have given rise to renewed debate about crisis prevention and resolution. In Debt Defaults and Lessons from a Decade of Crises, Federico Sturzenegger and Jeromin Zettelmeyer examine the facts, the economic theory, and the policy implications of sovereign debt crises. They present detailed case histories of the default and debt crises in seven emerging market countries between 1998 and 2005: Russia, Ukraine, Pakistan, Ecuador, Argentina, Moldova, and Uruguay. These accounts are framed with a comprehensive overview of the history, economics, and legal issues involved and a discussion from both domestic and international perspectives of the policy lessons that can be derived from these experiences.

Sturzenegger and Zettelmeyer examine how each crisis developed, what the subsequent restructuring encompassed, and how investors and the defaulting country fared. They discuss the new theoretical thinking on sovereign debt and the ultimate costs entailed, for both debtor countries and private creditors. The policy debate is considered first from the perspective of policymakers in emerging market countries and then in terms of international financial architecture. The authors' surveys of legal and economic issues associated with debt crises, and of the crises themselves, are the most comprehensive to be found in the literature on sovereign debt and default, and their theoretical analysis is detailed and nuanced. The book will be a valuable resource for investors as well as for scholars and policymakers.

About the Authors

Federico Sturzenegger is Visiting Professor of Public Policy at the Kennedy School of Government, Harvard University, and Professor at the Universidad Torcuato di Tella, Buenos Aires.

Jeromin Zettelmeyer is Assistant to the Director of the Western Hemisphere Department at the International Monetary Fund.

Content
  Preface ix

  Acknowledgments and Disclaimer xi

  I History, Economics, and Law 1

1 Sovereign Defaults and Debt Restructurings
Historical Overview

2 The Economics of Sovereign Debt and Debt Crises
A Primer 31

3 Legal Issues in Sovereign Debt Restructuring 55

  II The New Debt Crises, 1998-2005 83

Introduction 85

4 Russia 91

5 Ukraine 115

6 Pakistan 135

7 Ecuador 147

8 Argentina 165

9 Moldova 203

10 Uruguay 211

Afterword: The Dominican Republic 227

  III Policy 231

11 Debt Crises from the Perspective of an Emerging Market Economy Policymaker 233

12 International Financial Architecture 269

Appendix: Tools for the Analysis of Debt Problems 297

   Notes 329

   References 345

   Index