From Miracle to Crisis: Brazilian Foreign Debt and the Limits of Obligation (Case Study #9)


The debt crisis of the 1980s ranks among the worst financial threats in history. During the crisis, one observer claimed, "never in history have so many nations owed so much money with so little promise of payment." The largest of the debtors, Brazil, owed a staggering $100 billion, 11 percent of the world total. Only 10 years before the crisis it had been considered the economic marvel of the world.

This case examines the crisis from the perspective of the "limits of obligation." It explores the rights and responsibilities of the sovereign national governments involved in the crisis–especially in relation to their own domestic laws and international law. It also examines the roles of private banks and multinational institutions.

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