scholarly journals Debt perceptions: fairness judgments of debt relief for individuals and countries

2019 ◽  
pp. 1-20
Author(s):  
DAVID CHAVANNE
Keyword(s):  
Debt Relief ◽  
Profit Motive ◽  
Bank Debt ◽  
Perceived Fairness ◽  
Moral Intuitions ◽  
Debt Contract ◽  
Fairness Judgments

AbstractThis study examines how moral intuitions toward debt relief vary depending on whether a debt contract involves one country borrowing from another country or an individual borrowing from a bank. Participants respond to a vignette describing a basic debt dispute between a debtor and a lender. A judge in charge of settling the dispute decides to allow debt relief and participants express how fair they find the decision. Treatments vary (1) the debt context (international or person-bank), (2) the responsibility of lenders and debtors (whether their situations stem from bad luck or poor choices) and (3) whether a lender's profit motive is made salient. Results show that, across both international and person-bank debt, debt relief is perceived as being fairer when debtors are unlucky and when lenders are careless; profit salience, however, does not affect the perceived fairness of debt relief in either debt context. Results, when integrated with those from an initial related study, also point to anti-bank sentiment increasing the perceived fairness of debt relief when an individual borrows from a bank and to a consistent across-context ranking of the perceived fairness of debt relief in the scenario.

Staff Guidance Note on the Application of the Joint Fund-Bank Debt Sustainability Framework for Low-Income Countries

Policy Papers ◽  
2008 ◽  
Vol 2008 (3) ◽  
Author(s):  
Keyword(s):  
Low Income ◽  
Debt Relief ◽  
Low Income Countries ◽  
Bank Debt ◽  
Debt Sustainability ◽  
Poor Countries ◽  
Guidance Note ◽  
Heavily Indebted Poor Countries ◽  
Alternative Scenarios ◽  
Sustainability Framework

The objective of the joint Fund-Bank debt sustainability framework for low-income countries is to support LICs in their efforts to achieve their development goals without creating future debt problems. Countries that have received debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI) need to be kept on a sustainable track. Under the framework, country DSAs are prepared jointly by Bank and Fund staff, with close collaboration between the two staffs on the design of the macroeconomic baseline, alternative scenarios, the debt distress rating, and the drafting of the write-up.

The Effects of Debt Contracting on Voluntary Accounting Method Changes

2003 ◽  
Vol 78 (1) ◽  
pp. 119-142 ◽  
Author(s):  
Anne Beatty ◽  
Joseph Weber
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Bank Debt ◽  
Accounting Choice ◽  
Debt Contracts ◽  
Debt Contracting ◽  
Dividend Payment ◽  
Debt Contract ◽  
Performance Pricing ◽  
The Interest Rate

This study examines whether the provisions of a firm's bank debt contracts affect its accounting choices. Starting with a sample of firms who have bank debt and who also voluntarily changed accounting methods, we investigate whether the likelihood that the change in accounting method increased (rather than decreased) the borrower's income depends on (1) whether the change in accounting method affects the bank debt contract calculations, (2) the expected costs of violating the bank debt covenants, (3) whether performance pricing provisions affect the interest rate on the loan, and (4) whether the bank debt contract contains accounting-based dividend restrictions. After controlling for other motives for changing accounting methods, we find that borrowers whose bank debt contracts allow accounting method changes to affect contact calculations are more likely to make income-increasing rather than income-decreasing changes. This increase in likelihood of an income-increasing change is attenuated when expected costs of technical violation are lower because there is a single lender, and occurs for borrowers whose debt contacts have performance pricing and dividend restrictions. These results suggest that incentives to lower interest rates through performance pricing or to retain dividend payment flexibility influence borrowers' accounting method choices, thereby addressing the fundamental questions posed by Fields et al. (2001) of whether, under what circumstances, and how accounting choice matters.

Staff Guidance Note on the Application of the Joint Fund-Bank Debt Sustainability Framework for Low-Income Countries

Policy Papers ◽  
2010 ◽  
Vol 2010 (06) ◽  
Author(s):  
Keyword(s):  
Low Income ◽  
Debt Relief ◽  
Low Income Countries ◽  
Bank Debt ◽  
Debt Sustainability ◽  
Poor Countries ◽  
Guidance Note ◽  
Heavily Indebted Poor Countries ◽  
Alternative Scenarios ◽  
Sustainability Framework

The objective of the joint Bank-Fund debt sustainability framework for low-income countries is to support LICs in their efforts to achieve their development goals without creating future debt problems. Countries that have received debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI) need to be kept on a sustainable track. Under the framework, country DSAs are prepared jointly by Bank and Fund staff, with close collaboration between the two staffs on the design of the macroeconomic baseline, alternative scenarios, the debt distress rating, and the drafting of the write-up

Review of Low-Income Country Debt Sustainability Framework and Implications of the Multilateral Debt Relief Initiative (MDRI)

Policy Papers ◽  
2006 ◽  
Vol 2006 (13) ◽  
Author(s):  
Keyword(s):  
World Bank ◽  
Low Income ◽  
Debt Relief ◽  
Income Country ◽  
Low Income Countries ◽  
Bank Debt ◽  
Debt Sustainability ◽  
Low Income Country ◽  
Sustainability Framework

This paper reviews the experience with the joint IMF-World Bank Debt Sustainability Framework for low-income countries, including cooperation between the staffs, and highlights the implications of the Multilateral Debt Relief Initiative.

Shaking Off Burdens - Debt Relief and Moral Intuitions

Kyklos ◽  
2017 ◽  
Vol 70 (3) ◽  
pp. 381-401 ◽  
Author(s):  
David Chavanne
Keyword(s):  
Debt Relief ◽  
Moral Intuitions

Balance Sheet and Tax Aspects of Bank Debt Remission

2014 ◽  
Vol 9 (2) ◽  
pp. 119-128
Author(s):  
Edward Wiszniowski
Keyword(s):  
Balance Sheet ◽  
Debt Relief ◽  
Point Of View ◽  
Bank Debt ◽  
Optimal Form ◽  
Tax Laws ◽  
The Relationship

Tax and balance sheet aspects of bank debt redemption. This paper is devoted to the redemption of bank liabilities, which constitutes one of the tools used by banks in the re-structuring of borrowers' debts. This is not an optimal form of shaping the relationship between the creditor and the debtor but under certain conditions, in the case of a partial redemption or redemption of a certain components of the debt, it may at least partially off-set the outstanding claims of the creditor. From the point of view of the banks, in the case of debt relief, tax laws should be considered restrictive as they contain a very limited cost catalogue qualifying them to be considered as revenue costs. From the perspective of the balance sheet, liability redemption tends to be the most neutral because the banks are obligated to perform regular write-downs on receivables. Debt redemption usually occurs after possible execution alternatives against the debtor have been pursued, and therefore when a full write-down has been created on bank's liability. 

Folk-economic beliefs as moral intuitions

2018 ◽  
Vol 41 ◽  
Author(s):  
Neil Malhotra
Keyword(s):  
Resource Allocation ◽  
Moral Intuitions ◽  
Economic Beliefs ◽  
Evolutionary Explanations

AbstractAlthough Boyer & Petersen's (B&P's) cataloguing of and evolutionary explanations for folk-economic beliefs is important and valuable, the authors fail to connect their theories to existing explanations for why people do not think like economists. For instance, people often have moral intuitions akin to principles of fairness and justice that conflict with utilitarian approaches to resource allocation.

Undesirable Effects of Goal Setting on Perceived Fairness, Commitment, and Unethical Behavior

2018 ◽  
Vol 62 (2) ◽  
pp. 97-107 ◽  
Author(s):  
Nina Keith
Keyword(s):  
Goal Setting ◽  
Unethical Behavior ◽  
The United States ◽  
Goal Commitment ◽  
Management Technique ◽  
Long Term Effects ◽  
Perceived Fairness ◽  
Negative Effects ◽  
Positive Effects ◽  
And Performance

Abstract. The positive effects of goal setting on motivation and performance are among the most established findings of industrial–organizational psychology. Accordingly, goal setting is a common management technique. Lately, however, potential negative effects of goal-setting, for example, on unethical behavior, are increasingly being discussed. This research replicates and extends a laboratory experiment conducted in the United States. In one of three goal conditions (do-your-best goals, consistently high goals, increasingly high goals), 101 participants worked on a search task in five rounds. Half of them (transparency yes/no) were informed at the outset about goal development. We did not find the expected effects on unethical behavior but medium-to-large effects on subjective variables: Perceived fairness of goals and goal commitment were least favorable in the increasing-goal condition, particularly in later goal rounds. Results indicate that when designing goal-setting interventions, organizations may consider potential undesirable long-term effects.

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