Public debt sustainability

Abstract

Al though in Latin America public debt-to-GDP ratios continue to be generally lower than in other emerging countries, it has nevertheless not been possible to avoid liquidity problems, which some authors attribute to the low level and high volatility of public revenue, the weakness of domestic financial systems, and the mediocre quality of fiscal institutions. This article also emphasizes some exogenous factors, however. The combination of low economic growth rates and devaluations in a context of dollarized liabilities has given rise to a huge "snowball effect", which is what has come to be called "original sin": the impossibility for an emerging country of borrowing abroad in its own currency. Although the effort to control the dynamics of the public debt will continue to be mainly at the internal level, the medium-term sustainability of that debt will depend on actions by international financial institutions aimed at improving the public debt conditions of emerging countries.

Public debt around the world: a new data set of central government debt

“…In particular, we graphed the evolution of the debt over GDP for each incomplete series covering 29 countries for the 1980-2003 period. Our fourth and fifth sources were the CLYPS (Cowan et al, 2006) and ECLAC (Martner and Tromben, 2004) datasets that cover as many as 22 Latin American countries.…”

“…While global datasets like the IFS and WDI have limited information on public debt, there are some datasets that have good coverage for a limited subset of countries: the OECD for its member countries, Cowan, Levy-Yeyati, Panizza, and Sturzenegger (2006) and ECLAC (see Martner and Tromben 2004) for Latin America, and Jeanne and Guscina (2006) for 19 emerging market countries. 2 However, up to now there was no single source of data with a complete 1 We realized that obtaining data on public debt was a serious problem when we started working on a paper aimed at measuring the determinants of debt growth (Campos, Jaimovich and Panizza, 2006).…”

Public Debt around the World: A New Dataset of Central Government Debt

“…In particular, we graphed the evolution of the debt over GDP for each incomplete series covering 29 countries for the 1980-2003 period. Our fourth and fifth sources were the CLYPS (Cowan et al, 2006) and ECLAC (Martner and Tromben, 2004) datasets that cover as many as 22 Latin American countries.…”

“…While global datasets like the IFS and WDI have limited information on public debt, there are some datasets that have good coverage for a limited subset of countries: the OECD for its member countries, Cowan, Levy-Yeyati, Panizza, and Sturzenegger (2006) and ECLAC (see Martner and Tromben 2004) for Latin America, and Jeanne and Guscina (2006) for 19 emerging market countries. 2 However, up to now there was no single source of data with a complete 1 We realized that obtaining data on public debt was a serious problem when we started working on a paper aimed at measuring the determinants of debt growth (Campos, Jaimovich and Panizza, 2006).…”