In January, Columbia economics professors Martín Guzmán and Joseph Stiglitz published a report, “How New York State Lawmakers Can Help Address Debt Crises in the Global South,” to support legislative attempts to reform the state’s role in debt restructurings for countries with distressed economies. The report includes recommendations that legislation should blunt incentives for vulture funds, which profit from buying defaulted bonds and litigating full repayment through the courts, and reduce the interest rate accrued by creditors during the time between default and settlement.
These efforts are crucial, explain Guzmán and Stiglitz, because 3.3 billion people live in countries that spend more on debt service than on health….
