This comprehensive study traces the evolution of the international debt crisis from its beginnings in the early 1970s to the present. The author uses a sample of 24 major borrower and heavily indebted countries to explore the economic forces within developing countries and the external conditions which led to the build-up of serious debt and their subsequent inability to carry it. He focuses attention on the changing roles of multilateral lending agencies such as the IMF and the World Bank and examines the role played by U.S., European, and Japanese commercial banks in creating conditions which led to unsustainable levels of debt among Third World borrowers. Finally, O'Cleireacain details the changing attitude of the U.S., from the early approaches of the Reagan administration through Brady Plan initiatives of the Bush administration. Scholars in development economics and international finance will find O'Cleireacain's work an important contribution to current debates over the causes of and policy responses to the mounting Third World debt crisis.

In his discussion on the role of multilateral lending agencies, O'Cleireacain analyzes the lending policies of the IMF, the changing nature of IMF conditionality, and the relations between debtor countries and the IMF. By examining the appropriate role of private sector capital flows--which to some extent compete with lending flows available from the IMF and the World Bank--the author places the debt crisis in a wider international public policy context. He concludes that private lending by commercial banks is one of the fundamental causes of the crisis as borrowers have turned to them to avoid the watchdog role of the established multilateral lending agencies. Based on his extensive study of the sample countries, O'Cleireacain calls for the use of IMF and World Bank-endorsed development strategies which require external financing but use exports to generate the foreign exchange to service foreign debt. An appendix listing U.S. Treasury and Federal Reserve support operations for debtor nations, a bibliography, and an index complete the volume.

SEAMUS O'CLEIREACAIN is Associate Professor of Economics at the State University of New York at Purchase and Adjunct Associate Professor of Economics at Columbia University. He is Associate Director of the Center for Labor-Management Policy Studies at the Graduate School and University Center of the City University of New York, and Director of US-EC Seminars at the Institute on Western Europe, Columbia University.