In their presence, international assistance is helpful, but marginal. Developing countries that meet such criteria now have little difficulty obtaining resources from the private markets. In their absence, assistance is almost doomed to failure. It is this grim reality that critics of the World Bank and the International Monetary Fund fail to confront. The legitimate criticism of those institutions is not that they have been too tough, but that they have been far too weak in supporting member governments that have neither the capacity nor the intention to do as they have promised.
States become bankrupt financially because they are already bankrupt ideologically and politically.
One of the greatest challenges facing the world community consists in dealing with such situations. Professor Jeffrey Sachs of Harvard University has argued persuasively for an international bankruptcy procedure. But there will often need to be a security arrangement as well. One possibility would be to reinstate the idea of a UN protectorate. International trade and investment.