The large debt burden reduced the incentive that governments have to undertake economic reform because
A) many of the economic gains from reform accrue to foreign lenders.
B) these societies suffer from geographical isolation.
C) these societies have adverse ecologies.
D) these societies have high fertility rates.
E) these societies have a recent history of civil or international war.

Question

Quizplus · Accepted Answer

A large debt burden means that a significant portion of a government's budget goes towards servicing the debt and paying interest to foreign lenders. This reduces the amount of resources that can be allocated towards economic reform, and can make governments hesitant to undertake reforms that may not immediately benefit their own society but primarily benefit foreign lenders.

The Large Debt Burden Reduced the Incentive That Governments Have