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How to improve the effectiveness of the World Bank's negative pledge clause as a legal and policy instrument

Public debt incurred by developing countries has become an ardently debated issue in international relations. The competing interests of creditors and debtors, combined with the increasing necessity of advancing welfare worldwide, make it difficult to establish a workable scheme that provides adequate assistance to needy countries. Foreign aid is evidently part of the solution to development problems. However, conditions imposed by international lenders bring about certain discontents. / The World Bank's negative pledge clause forbids a public borrower from securing external debt that is preferential to that of the Bank. This covenant also includes several exceptions: short-term secured banking transactions and financing, through the transfer of state-owned assets, are allowed. Moreover, only in exceptional circumstances does the Bank waive the clause's application. Thus, in order to secure foreign debt, a borrowing government is usually forced to contract financing that falls within the covenant's exceptions. / This Paper analyzes the World Bank's negative pledge clause and compares it to the provisions used in commercial lending. It also reviews the historical tendencies and current trends with respect to sovereign borrowing, and concludes that the World Bank's negative pledge clause should be amended, in order to bring it closer to commercial practice. It is argued that the amendments proposed in this thesis will enhance the Bank's dual function and role as both a creditor and a development institution.

Identiferoai:union.ndltd.org:LACETR/oai:collectionscanada.gc.ca:QMM.82656
Date January 2005
CreatorsChmielewski, Maciej
PublisherMcGill University
Source SetsLibrary and Archives Canada ETDs Repository / Centre d'archives des thèses électroniques de Bibliothèque et Archives Canada
LanguageEnglish
Detected LanguageEnglish
TypeElectronic Thesis or Dissertation
Formatapplication/pdf
CoverageMaster of Laws (Institute of Comparative Law.)
RightsAll items in eScholarship@McGill are protected by copyright with all rights reserved unless otherwise indicated.
Relationalephsysno: 002223790, proquestno: AAIMR12670, Theses scanned by UMI/ProQuest.

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