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Russia's Debt Crisis and the Unofficial Economy

Russia's foreign debt problems worsened substantially after the financial crisis of 1998. The paper focuses on the key role of the government in servicing foreign debt and promoting institution building by showing how foreign debt influences the choice between official and unofficial taxation. The enterprise sector is assumed to reallocate its resources between domestic investment and capital flight. It is discussed under which conditions debt rescheduling may create incentives for the government to promote institution building. The results of this paper shed light on the conditions under which the recent agreement with the London Club to write off substantial amounts of former Soviet debt can be successful.
Year of publication:
2000
Authors: Buch, Claudia M. ; Heinrich, Ralph P. ; Lusinyan, Lusine ; Schrooten, Mechthild
Institutions: DIW Berlin (Deutsches Institut für Wirtschaftsforschung)
Subject: Foreign debt | debt restructuring | Russian Federation
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application/pdf
Series:
Type of publication: Book / Working Paper
Language: German
Notes:
Number 208 28 pages long
Classification: F34 - International Lending and Debt Problems ; H63 - Debt; Debt Management
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