Should They Honor The Promises of Their Parents' Leaders?

Gosseries, Axel [UCL]

Should the foreign debt of the world’s poorest countries be cancelled? In this essay, I am concerned with whether a generational perspective makes a difference in answering this question. I will show that it does, and that alternative accounts of repayment obligations are possible. I argue that a distributive theory of justice is not only appropriate to address the challenges to justice raised by long-term sovereign indebtedness, but that it is also superior to the solution offered by the odious debt doctrine. Unlike the odious debt doctrine, a distributive view is capable of taking into account the separateness of generations. More specifically, I also argue that the need to preserve creditors’ incentives to lend to the poor in order to ensure that the latter keep having access to credit for important development purposes requires the adoption of a narrow, problem-specific view, which focuses on the distributive impact of the loan transaction, rather than a broad distributive view, which looks at the general distributive situation of the two descendent communities.