Unsustainable and untransparent public debt represents a democratic deficit and can lead to instability and social unrest sparked by fiscal cuts and increases to the cost of living. Effective parliamentary oversight isn't just about fiscal responsibility—it's about strengthening democratic governance itself.

The global debt crisis

The world faces a mounting debt crisis with severe consequences for development. Twenty-five of the poorest countries now spend more on debt repayments than on education, health and social policy combined, while 60% of low- and middle-income developing countries are highly debt vulnerable.

This crisis has complex origins, including global power dynamics, historical inequalities, governance decisions, climate impacts, and the compounding effects of recent global shocks—from COVID-19 to Russia's invasion of Ukraine.

The democratic deficit

Unsustainable and opaque debt undermines the social contract at the heart of democratic governance. Breaking this cycle requires a fundamental shift in oversight and accountability for how governments borrow and manage debt.

This is why we advocate for doing debt democratically.

The parliamentary solution

Parliaments—as representatives of people's interests, lawmakers, and agents of accountability—are critical fiscal policy institutions with unique oversight responsibilities. Yet their ability to exercise these responsibilities depends largely on debt transparency and institutional capacity.

WFD's research shows that effective debt governance requires:

• Transparent Debt Management Strategies
• Access to Annual Borrowing Plans
• Regular debt reporting
• Scrutiny of loan terms and conditions
• Oversight of contingent liabilities and State-Owned Enterprises