Kaushik Basu

Sudipto Mundle

Kenneth Kletzer

Eric Verhoogen

Maitreesh Ghatak

This volume is a testament to the breadth and policy relevance of development economics today. It grapples with questions on how to design anti-poverty policies and under what conditions we can expect them to be successful. It concentrates on programmes and policies for India and covers international experience with cash transfer programmes. The work in this area applies core theoretical insights to policy discussions surrounding poverty measurement, income inequality, rural unemployment, and compares alternative growth strategies in terms of their impact on poverty and inequality. The book closes with chapters that trespass the boundaries of economics and enter the territory of politics, to engage urgent concerns of the day that are the basis of much dispute and debate. The essays are collected under three broad themes-anti-poverty policies; land, labour, and financial markets; and political economy.

Development, Distribution, and Markets

This paper compares the restructuring of sovereign bonds with and without collective action clauses. One conclusion is that collective action clauses can allow efficient debt renegotiation in a formal model of sovereign debt renegotiation while unanimity rules offer incentives for opportunistic behavior by bondholders that leads to inefficient outcomes. With collective action clauses, the mutual gains from renegotiation can be internalized by bondholders so that the holders of each bond issue have incentives to participate in a collective debt restructuring. The analysis abstracts from transactions costs, and the last conclusion might well be sensitive to renegotiation and coordination costs.

Kenneth Kletzer

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