Djankov, Hart, McLiesh, and Shleifer (2008) analyze debt enforcement efficiency across 88 countries using a case study of a hotel facing default. Insolvency practitioners from these countries describe how debt enforcement would proceed, providing data on time, cost, and asset disposition. They construct a measure of enforcement efficiency, which is strongly correlated with per capita income and legal origin, and predicts debt market development. Key findings include: only 36% of countries achieve the efficient outcome of preserving the hotel as a going concern; on average, 48% of the hotel's value is lost in debt enforcement; legal origins and income are the most important determinants of efficiency; richer countries have a comparative advantage in complex procedures. The study also finds that legal rules affecting the absolute priority of secured creditors, and procedures like foreclosure, liquidation, and reorganization, influence efficiency. The results show that legal systems with higher efficiency are more likely to develop robust debt markets. The study highlights the importance of legal and institutional factors in determining the efficiency of debt enforcement and the development of debt markets.Djankov, Hart, McLiesh, and Shleifer (2008) analyze debt enforcement efficiency across 88 countries using a case study of a hotel facing default. Insolvency practitioners from these countries describe how debt enforcement would proceed, providing data on time, cost, and asset disposition. They construct a measure of enforcement efficiency, which is strongly correlated with per capita income and legal origin, and predicts debt market development. Key findings include: only 36% of countries achieve the efficient outcome of preserving the hotel as a going concern; on average, 48% of the hotel's value is lost in debt enforcement; legal origins and income are the most important determinants of efficiency; richer countries have a comparative advantage in complex procedures. The study also finds that legal rules affecting the absolute priority of secured creditors, and procedures like foreclosure, liquidation, and reorganization, influence efficiency. The results show that legal systems with higher efficiency are more likely to develop robust debt markets. The study highlights the importance of legal and institutional factors in determining the efficiency of debt enforcement and the development of debt markets.