TY - BOOK ID - 133358410 TI - Subnational Insolvency : Cross-Country Experiences and Lessons AU - Liu, Lili AU - Waibel, Michael PY - 2008 PB - Washington, D.C., The World Bank, DB - UniCat KW - Access to Finance KW - Bankruptcy and Resolution of Financial Distress KW - Banks and Banking Reform KW - Credit markets KW - Debt KW - Debt Markets KW - Debt restructuring KW - Defaults KW - Finance and Financial Sector Development KW - Financial distress KW - Insolvency KW - Insolvency law KW - Insolvency mechanisms KW - Insolvency procedures KW - Public Disclosure KW - Strategic Debt Management UR - https://www.unicat.be/uniCat?func=search&query=sysid:133358410 AB - Subnational insolvency is a reoccurring event in development, as demonstrated by historical and modern episodes of subnational defaults in both developed and developing countries. Insolvency procedures become more important as countries decentralize expenditure, taxation, and borrowing, and broaden subnational credit markets. As the first cross-country survey of procedures to resolve subnational financial distress, this paper has particular relevance for decentralizing countries. The authors explain central features and variations of subnational insolvency mechanisms across countries. They identify judicial, administrative, and hybrid procedures, and show how entry point and political factors drive their design. Like private insolvency law, subnational insolvency procedures predictably allocate default risk, while providing breathing space for orderly debt restructuring and fiscal adjustment. Policymakers' desire to mitigate the tension between creditor rights and the need to maintain essential public services, to strengthen ex ante fiscal rules, and to harden subnational budget constraints are motivations specific to the public sector. ER -