Around the turn of the century, there was a broad recognition that the debt burden of many developing countries was impeding their growth. Much of the debt had accumulated in the context of the Cold War and had not resulted in productive investment.

Over the past 50 years, Pakistan’s record on macroeconomic management has been mixed. The next crisis is now approaching. Most economists agree that the post-election government will have no alternative but to approach the IMF yet again for another bailout with associated policy conditionality...