This is a joint project of the Carnegie Council and the New School University's Graduate Program in International Affairs, with additional financial support from the Ford Foundation.  

Severe sovereign indebtedness can contribute to problems of many kinds:

  • It can limit countries' capabilities to provide the basic social services that are required to secure minimally decent living conditions for their citizens, and can make it difficult for countries to pursue policies that are likely to contribute to their long-term development.

  • Ineffective and unfair practices for managing the restructuring of debt can lead to defaults that may also significantly harm creditors' and investors' interests, and can create disincentives for lending and investment that can be crucial to the prospects of wealthy and poor countries alike.

  • An often overlooked but very important effect of financial crises and the debts they often engender is that they can lead to increased dependence of developing countries on foreign creditors and international institutions, limiting the capabilities of their citizens to exercise meaningful control over their policies and institutions.

In light of these problems, the ethical importance of examining the legal arrangements and political practices with regard to international lending and debt repayment is evident.

The Council's work in the area is intended to generate critical debate among diverse stakeholders on the ethical questions raised by problems of sovereign indebtedness; to identify the principles that are relevant for the ethical assessment of proposed solutions to such problems; and to explore the policies and institutional arrangements that such principles would likely demand under present conditions.