The politics of foreign debt in Latin America a study of the debtors’ cartel

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Abstract
This analysis of the foreign debt problem in Latin America shows that this economic burden is onerous and will not be reduced in the short run. The region's political leaders perceived that collective bargaining could increase their bargaining leverage with foreign lenders and could produce more advantageous repayment schedules for most nations. However, despite verbal backing and the economic promise of collective bargaining, a debtors’ cartel failed to materialize. Evaluations of the political dynamics in key nations anticipated creditors. This analysis also shows that the debtors’ cartel failed because collective bargaining did not gain domestic political support. Foreign influence was tangential to the outcome. Given this political climate, the chances for a revival of collective bargaining are very slim.

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