in: Andreas Antoniades / Ugo Panizza (eds.), Global debt dynamics: crises, lessons, governance, Abington: Routledge, 137-155
Debt crises in developing countries in previous decades have revealed the need for a reform of the current global debt governance (GDG) system that is characterised by a high degree of fragmentation, parallel structures, and ineffective instruments. The current GDG system has neither prevented nor fully resolved debt crises in developing countries. To establish an efficient and effective GDG framework it is necessary to reform the GDG system at two different levels. At the instrument level, it is time to reform existing instruments for both prevention and resolution of debt crises and to put in place new instruments such as an insolvency procedure for states. At the systemic level, establishing an adequate GDG system does not only mean choosing appropriate individual instruments but also using them in a complementary manner. Instruments belonging to one set of tools – crisis prevention or crisis resolution – should be linked to each other. In the same vein, the two sets of instruments for crisis prevention and crisis resolution should be combined.