ABSTRACT
As the debt crises of developing countries continue with no end in sight, the structure and aggregate amount of these countries' obligations are receiving increasing attention. A structure of obligations dominated by general-obligation floating rate borrowing is far from ideal (Lessard and Williamson 1985; Krugman 1988) and has contributed to the severity of the crisis. The alternatives in resolving the crisis are receiving even greater attention, but with much less agreement. Debtequity swaps and other variants that combine debt buybacks with alternative forms of finance, typically voluntary exchanges, are held out as the leading way out of the crisis by institutional observers, bankers, private sector groups in developing countries and a few academics (see, for example, Ganitsky and Lema 1988; Regling 1988). But such exchanges are typically depicted as inconsequential or even damaging to the interests of developing countries by many academic economists and developing-country officials (see, for example, Bulow and Rogoff 1988; Dornbusch 1988; Krugman 1988; Froot 1989).
