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The global economy

Debt relief

Explain debt relief and weigh it, including moral hazard and conditionality

Specification: AQA 4.2.6.5 Edexcel 4.3.3

Key terms
Debt relief
Debt relief means that a country's debt can be partially or totally forgiven, or the growth of the debt can be slowed or stopped.
Debt rescheduling
Debt rescheduling is relief in which the dates when interest or repayments fall due are delayed or rearranged, without cancelling the debt.

Two ideas for weighing debt relief

Can you name the two ideas an answer on debt relief has to weigh?

One is a risk in how borrowers behave; the other is the usual guard against it.