With a few rare exceptions, "most governments [of the developing countries] have not been willing to act counter to neoliberal policy. The links between the leaders of these countries and the hub of decision making in most industrial countries are multifarious. Some of the ruling presidents, in particular in Africa, were brought to power during the Cold War, or owe their positions to it. Some are in power because they helped the elimination of or allowed the overthrow of heads of states who, like Thomas Sankara, the President of Burkina Faso and assassinated in 1987, wanted to commit their country to alternative, locally generalised development and social justice. Others simply prefer to follow the neoliberal current for fear of being destabilized or overthrown.
But there is another factor of conservatism that works in favour of large debt and should not be underestimated. Most governments, both left and right wing, try to gain the goodwill of the local capitalists who have every interest in seeing the debt mechanism continue. This mechanism assures them (as it does for the capitalists in the North) a juicy profit because they lend money to the state which then pays them back at very advantageous rates of interest. It is extremely rare to find a recent case in which a state has repudiated its public debt to local bankers. So most bankers prefer to lend to the state and to other public institutions where their loans are guaranteed by the government, rather than to local producers—especially if they are small or medium-sized producers. Lending to the governmnet is far less risky and far more profitable. Several presidents in power today have been elected promising to reduce social inequality. They promised to put an end to the parasitic rent-collecting bankers and to free the country from the yoke of the international creditors. Brazil's experience is a case in point. Today [2010], bankers and the rest of the capitalist class are rubbing their hands in glee under friendly governments of the party in power—the Workers' Party!—and President Ignacio Lula Da Silva.
To complete the picture, many of the top leaders in the countries of the South are graduates of the top business schools or universities of the North (Harvard, Columbia, Princeton, Yale, Stanford, Oxford, Cambridge, HEC Business School in Paris) and have been educated in the liberal mold..."
Toussaint and Millet, Debt, the IMF, and World Bank, pp. 228-30, 210
But there is another factor of conservatism that works in favour of large debt and should not be underestimated. Most governments, both left and right wing, try to gain the goodwill of the local capitalists who have every interest in seeing the debt mechanism continue. This mechanism assures them (as it does for the capitalists in the North) a juicy profit because they lend money to the state which then pays them back at very advantageous rates of interest. It is extremely rare to find a recent case in which a state has repudiated its public debt to local bankers. So most bankers prefer to lend to the state and to other public institutions where their loans are guaranteed by the government, rather than to local producers—especially if they are small or medium-sized producers. Lending to the governmnet is far less risky and far more profitable. Several presidents in power today have been elected promising to reduce social inequality. They promised to put an end to the parasitic rent-collecting bankers and to free the country from the yoke of the international creditors. Brazil's experience is a case in point. Today [2010], bankers and the rest of the capitalist class are rubbing their hands in glee under friendly governments of the party in power—the Workers' Party!—and President Ignacio Lula Da Silva.
To complete the picture, many of the top leaders in the countries of the South are graduates of the top business schools or universities of the North (Harvard, Columbia, Princeton, Yale, Stanford, Oxford, Cambridge, HEC Business School in Paris) and have been educated in the liberal mold..."
Toussaint and Millet, Debt, the IMF, and World Bank, pp. 228-30, 210
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