COC

A Catholic Perspective on Just Debt Solutions. Ethical Principles in Favor of FTAP

Rethinking Bretton Woods | Sat, Apr 19, 2003

By Seamus O'Gorman

"This paper responds to a statement of the managing director of the IMF that "Ethical principles, principles common to all civilisations are important, yes, essential for an international institution such as the IMF'. It explores what light can be shone on a concrete policy proposal such as the Sovereign Debt Restructuring Mechanism [SDRM] by an ethical analysis which derives from the tradition of Christian reflection embodied in Catholic Social Teaching. It outlines four core insights from this tradition: the universal destination of the goods of the earth; the limits of the market to achieve human ends; the responsibility of governments to work for the common good; and the right of people to participate in decisions that effect them. It argues that this framework gives strong support to the case made by many who argue that the international community should take the opportunity provided by the present discussion on debt crisis mechanisms to go beyond the modest reforms of the SDRM to establish a Fair and Transparent Arbitration Procedure [FTAP] to deal with the problem of recurring international debt crises."

Abstract: This paper responds to a statement of the managing director of the IMF that "ethical principles, principles common to all civilisations are important, yes, essential for an international institution such as the IMF'. It explores what light can be shone on a concrete policy proposal such as the Sovereign Debt Restructuring Mechanism [SDRM] by an ethical analysis which derives from the tradition of Christian reflection embodied in Catholic Social Teaching. It outlines four core insights from this tradition: the universal destination of the goods of the earth; the limits of the market to achieve human ends; the responsibility of governments to work for the common good; and the right of people to participate in decisions that effect them. It argues that this framework gives strong support to the case made by many who argue that the international community should take the opportunity provided by the present discussion on debt crisis mechanisms to go beyond the modest reforms of the SDRM to establish a Fair and Transparent Arbitration Procedure [FTAP] to deal with the problem of recurring international debt crises.

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