01652cas a2200241 a 4500 AALejournalIMF005120 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451870107 1018-5941 BD-DhAAL BD-DhAAL Alichi, Ali. A Model of Sovereign Debt in Democracies / Ali Alichi. Washington, D.C. : International Monetary Fund, 2008. 1 online resource (34 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper develops and empirically tests a political economy model of sovereign debt. The main incentive for repaying sovereign debt is to maintain access to international capital markets. However, in a democracy, one generation may choose default regardless of its consequences for future generations. An old generation with little concern for its country's access to capital markets can force a default on debt if it has the majority of voters. On the other hand, if the younger generation is more numerous, it can force repayment of previously defaulted debt. Other voter heterogeneities, such as in income, can generate similar results. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2008/152 Full text available on IMF http://elibrary.imf.org/view/journals/001/2008/152/001.2008.issue-152-en.xml IMF e-Library