...their Net Present Value of external debt by approximately two-thirds. Of these countries, 19 have reached the completion point and have been granted unconditional debt service relief of over US$37 billion." (1) In this essay we address the question of whether this program is consistent with a view of justice commonly known as liberal egalitarianism. Liberal egalitarianism holds that agents should be held responsible only for free and informed choices, which in an international context can be understood as saying that a population should be held responsible only for policy choices to which they have given their informed consent. Liberal egalitarianism is an attractive view of justice because it combines two moral ideals that are considered to be fundamental by most people: first, the egalitarian ideal that inequalities resulting from factors outside an agent's control should be eliminated, and second, the liberal ideal that inequalities resulting from factors under an agent's control should be accepted. (2) Liberal egalitarian ethics has implications for many aspects of debt relief policy, including the question of what the overall level of debt relief should be. We focus, however, on its implications for how resources made available for debt relief should be distributed among poor countries.

An important motivation for engaging with these questions is the observation that there is considerable variation in the per capita debt relief given to poor countries in the HIPC Initiative. (Data for the eighteen countries that had completed the program as of the end of 2005 are given in Figure 1.) This variation follows from the fact that the objective of the HIPC Initiative is to bring the debt of the participating countries down to a "sustainable" level. (3) We want to examine whether these differences and the resulting distribution of debt relief is fair. Furthermore, if the distribution of debt relief is judged to be unfair, it is important to ask whether donors compensate by adjusting other aid flows.

[FIGURE 1 OMITTED]

These types of questions are equally relevant for more recent initiatives, such as the write-off begun in 2006 of more than 40 billion U.S. dollars (USD) of debt owed by the poorest nations to the International Monetary Fund (IMF), the World Bank, and the African Development Bank. Within such an initiative, it is important to ask to what extent the resulting distribution of debt relief and aid is just.

The task of achieving a just and efficient distribution of debt relief, and a just and efficient distribution of aid more generally, raises a number of complex challenges. First, one needs to formulate more precisely how to measure a country's overall situation. Second, one needs to take into account a country's effectiveness in applying international aid. And finally, one needs to take into account incentive problems. All these issues have been extensively discussed in the development literature. It is by now well established that a country's per capita disposable income is far from a perfect measure of its status, that countries may use aid more or less effectively, and that the possibility of debt relief in the future might induce countries to undertake excessive borrowing. (4) Nevertheless, in order to achieve a sharp focus on the question of what constitutes a fair distribution of debt relief and aid, we will narrow our framework and avoid detailed discussion of these issues. To simplify, we will take a nation's disposable income per capita to be the relevant outcome, and we will assume that all recipient countries are equally effective in their use of international aid. Furthermore, we will not study the incentive effects of a fair distribution of debt relief and aid. In the implementation of any debt relief and aid program, fairness needs to be balanced against incentives, but in order to do so we first need to understand the nature of both sets of considerations.

We argue that the HIPC Initiative is not at all consistent with liberal egalitarian commitments. More generally, we show why the debate on debt relief must move beyond a discussion of whether countries should be held responsible for their sovereign debt. That question of just distribution of debt release needs to be superseded by a more careful and broader classification of which of the factors affecting a country's situation it should be held responsible for and which it should not. Though it is beyond the scope of this essay to outline a detailed proposal in this respect, we will show how a liberal egalitarian framework can be used to evaluate critically the justice of such debt relief programs as the HIPC Initiative.

NATIONAL RESPONSIBILITY AND INTERNATIONAL EQUALIZATION OF PER CAPITA INCOMES

Liberal egalitarians draw a distinction between what agents should be held responsible for (responsibility factors) and what they should not be held responsible for (nonresponsibility factors). A liberal egalitarian approach to justice can thus be seen as consisting of two parts: the liberal principle that morally relevant inequalities due to differences in responsibility factors should be accepted, which we call the principle of responsibility; and the egalitarian principle that morally relevant inequalities due to nonresponsibility factors should be eliminated, which we call the principle of equalization. By way of illustration, in the context of income distribution, if we assume that talent and effort are the only factors that affect a person's pretax income and we hold people responsible for their effort but not their talent, then a liberal egalitarian framework justifies inequalities in income due to differences in effort...

NOTE: All illustrations and photos have been removed from this article.



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