Moreover, Lee Considersseparately '^cial rescheduling” (that is reschedul-
ing payments, on both public and private debt, guaranteed by creditor coun-
tries’ government or o^ial agencies) from“commercial bank rescheduling” (that
is rescheduling bank loans which are not guaranteed). According to his results,
while o^ial rescheduling decisions depend on three factors: the economic perfor-
τance of borrowers, the level of indebtedness and the level of interest rates, for
coττercial rescheduling cases (besides the aforeτentioned factors) the access to
international credit markets becomes also signi...cant.
3. The Theoretical model
The main idea of the theoretical paper (Marchesi and Thomas, 1999) is that
the adoption of an IMF programme can function as a screening mechanism that
allows creditors to distinguish between those countries which intend to use the
'debt relief” as an incentive to invest and later repay and those which do not (or
cannot) do it.
It is assumed that there are two types of country (one with a high return
on the investment, and the other with a low return or willingness to invest) and
asymmetry of information on the country’s type. In the presence of a debt over-
hang, the high productivity country may choose not to undertake the investment,
despite it being socially e^ient to do so. In this case the creditor would like to
o∏er the country some debt relief, but the low productivity type will also bene...t
from the debt relief. When the country is credit constrained (which seems a plau-
sible hypothesis dealing with indebted countries), this problem can be avoided if
the country decides to undertake an IMF programme in return for debt reduction
(and possibly new money in the form of an IMF loan): only the high productivity
type would be prepared to bear the adjustment costs and thus a separation ofthe
types is achieved.
14