Can Human Development Bonds Reduce the Agency Costs of the Resource Curse?

Sperduto Luke ()
Additional contact information
Sperduto Luke: International Capital Markets, Allen & Overy LLP, 1 Bishops Square, London, UK

The Law and Development Review, 2019, vol. 12, issue 1, 191-245

Abstract: Especially in resource rich countries with weak institutions of governance, the interests of governments often diverge from those of their citizens and creditors. Sovereign bond contracts can potentially help align these interests, to the benefit of all parties, by indexing payment obligations to improvements in the health and education of the issuer’s citizenry. To that end, this Article proposes a Human Development Bond (HDB) with a variable coupon schedule that both insures issuers against recessions and incentivizes them to encourage investment in human capital when economic growth is strong. The potential benefits of such an instrument can only be realized, however, with significant support from the international community. Moreover, further empirical research is needed to calibrate the HDB’s coupon schedule to provide well-timed and appropriately sized debt relief.

Keywords: inclusive growth; state-contingent debt; sovereign debt; resource curse; human capital (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/ldr-2018-0061 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:lawdev:v:12:y:2019:i:1:p:191-245:n:7

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/ldr/html

DOI: 10.1515/ldr-2018-0061

Access Statistics for this article

The Law and Development Review is currently edited by Yong-Shik Lee

More articles in The Law and Development Review from De Gruyter
Bibliographic data for series maintained by Peter Golla ().