Many creditors will lend to a government without regard to the government's legitimacy, allowing illegitimate governments to saddle the country with debt and burdening the successor governments with repayment. Ex ante loan sanctions would put creditors on notice that any future loans to a regime would be considered the responsibility of that regime and would not be considered transferable to successor governments.
CGD convened a working group co-chaired by visiting fellow John Williamson, non-resident fellowMichael Kremer, and Seema Jayachandran to investigate whether these kind of loan sanctions could be added to the toolkit of international diplomacy, and, if so, how they could best be implemented. The group released their final report “Preventing Odious Obligations: A New Tool for Protecting Citizens from Illegitimate Regimes” in 2010.
For further information on the group’s work and ongoing policy outreach around the tool, contact policy outreach associate Jenny Ottenhoff (jottenhoff@cgdev.org).
Members of the group, who serve in their individual capacity, are listed below.
Prevention of Odious Obligations Working Group Members:
Nancy Birdsall, Center for Global Development
Lee Buchheit, Cleary Gottlieb Steen & Hamilton LLP
Josh Cohen; Stanford University
Paul Collier; Oxford University
Kimberly Elliott, Center for Global Development
Jesus Estanislao, Institute of Corporate Directors, former Secretary of Finance of the Philippines
Charmian Gooch, Global Witness
Henrik Harboe, Norwegian Ministry of Foreign Affairs
Seema Jayachandran (Co-Chair), Stanford University
Stephen Krasner, Stanford University
Michael Kremer (Co-Chair), Harvard University
Benjamin Leo, Cisco Systems
Todd Moss, Center for Global Development
Richard Newcomb, DLA Piper
Y. Venugopal Reddy, University of Hyderabad, former Governor of the Reserve Bank of India
Nuhu Ribadu, Center for Global Development, former Chairman of Nigeria's Economic and Financial Crimes Commission
Neil Watkins, ActionAid
John Williamson (Co-Chair), Center for Global Development; Peterson Institute for International Economics
Ernesto Zedillo; Yale Center for the Study of Globalization, former President of Mexico