Debt-sharing and secession: A generational accounting approach

Cattoir, Philippe;Docquier, Frédéric
(2000)

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  • Cattoir, Philippe
    Author
  • Docquier, FrédéricUCLouvain
    Author
Abstract
This paper investigates one of the most important financial issues arising from a secession or a country partioning, namely the sharing of the national public debt. Extending Dr©·ze's distributive neutrality condition, we use the generational accounting technique and propose a dynamic debt-sharing criterion which takes into account both the true debt future generations inherit and their contributive capacity. The equivalence with Dr©·ze's static rule is only obtained in the steady growth framework in the absence of initial regional debt. An application of our criterion to the Belgian case offers striking results.
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Cattoir, P., & Docquier, F. (2000). Debt-sharing and secession: A generational accounting approach (CORE Discussion Papers 2000/3). https://hdl.handle.net/2078.5/39724