The cooperation between international organizations, private banks, and national governments as put forward in the Baker Plan has prevented major disruptions of the international financial system resulting from the debt crisis. Rescheduling agreements have been reached in large numbers....

A number of highly indebted developing countries have experienced severe foreign exchange shortages for a couple of years. They could not simply roll over old debt any more by taking up new loans. Since export revenues could not be raised sufficiently, quite a few countries resorted to a...