DEBT ARREARS IN LATIN-AMERICA - DO POLITICAL VARIABLES MATTER

Political instability and debt problems characterise Latin America in the last two decades. This article estimated a logit model of debt arrears including economic as well as political variables. Our results suggested that both economic and political indicators affected debt repayment in Latin America during 1971-86. We also cast a shadow on the viewpoint that authoritarian and military regimes have an advantage over democratically elected governments with regard to debt related issues.