Third World debt, seen as distant from the realm of international affairs and ethics, is often subject to abstract economic analysis. Peter Bauer argues that in fact the way in which debt is addressed by debtors and lenders is heavily politicized and should be subject to ethical considerations. Many Third World countries choose to prolong debt even though they are capable of repaying it; moreover, the methods of gauging and reporting current income are spurious and subject to manipulation by countries' trade policies. The ethical questionability of some Third World practices is matched by equally questionable activity in the West. Special interest groups' agendas and banks' eyes for profits influence economic policy in favor of Third World countries, further increasing their debt. Bauer's discussion of these issues of denial and permissiveness depicts Third World debt as a political transaction that wrongly escapes ethical judgement.
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