If the mechanism didn’t work, then the precommitment wouldn’t be credible, and the people making the loans would have known that there is no credible precommitment.
And thus the country will fall. Since the leaders care about the country, they’d rather pay back some loans than let it fall, so the mechanism will work, right?
If the mechanism didn’t work, then the precommitment wouldn’t be credible, and the people making the loans would have known that there is no credible precommitment.
And thus the country will fall. Since the leaders care about the country, they’d rather pay back some loans than let it fall, so the mechanism will work, right?