Template-Type: ReDIF-Paper 1.0
Title: Creating Creditworthiness through Reciprocal TradeIncomplete
  	Contracts and Privatization
Author-Name: Monika Schnitzer
Abstract: In the aftermath of the international debt crisis of the 1980s
  	reciprocal trade arrangements experienced a resurgence. This paper
  	examines how countertrade can help highly indebted countries to
  	finance imports if they are not able to use standard credit
  	arrangements. It compares the credit enforcement mechanisms
  	discussed by the sovereign debt literature with those available
  	under countertrade agreements and shows under what conditions
  	countertrade can increase the debt capacity of highly indebted
  	countries. The implications of our model for the design of optimal
  	countertrade contracts are consistent with empirical evidence from a
  	data set of 230 countertrade transactions.
Keywords: Countertrade, sovereign debt, creditworthiness.
Classification-JEL: F13; F34; L14
Creation-Date: 1995-03
Handle: RePEc:bon:bonsfa:453