External Forces and Zambia’s Permanent Debt Crisis

With the exception of very brief periods in its history, Zambia has been in a permanent state of debt crisis. Contrary to the literature that focuses on internal explanations for debt accumulation, this article argues that external forces have been dominant in the Zambian case. Specifically, we consider the role played by three such forces: the international price for copper, International Monetary Fund-imposed conditionality on fiscal constraints and US monetary policy. We argue that these three forces have at various times ‘conspired’ in influencing debt dynamics in Zambia. The analysis presented suggests more realistic pathways through which the country and international actors can prevent or, at the very least, better manage the dangerous build-up of debt. Further, the analysis provides insights into potential reforms of the international financial architecture that could help prevent future debt crises in the developing world.