---
entity_slug: unfunded_debt
evaluator: null
evaluated_at: '2026-02-23T06:35:06.946322'
overall_score: 4.4
scores:
- name: definition_precision
  value: 4.0
  max_value: 5.0
  rationale: The definition clearly distinguishes unfunded debt from funded debt by
    the absence of dedicated revenue streams, and specifies it includes short-term
    obligations and arrears. The definition is precise and non-circular, though it
    could be slightly more specific about the temporal aspects.
- name: source_grounding
  value: 5.0
  max_value: 5.0
  rationale: This concept is directly grounded in Smith's explicit discussion in Book
    V, Chapter 3, where he systematically distinguishes between funded and unfunded
    debt as fundamental categories of government borrowing. Smith clearly presents
    this as the first method governments use when contracting debt.
- name: domain_placement
  value: 5.0
  max_value: 5.0
  rationale: The "Regulation" domain is appropriate since this concerns government
    debt management and fiscal policy mechanisms. Unfunded debt represents a regulatory/administrative
    approach to government finance rather than a market mechanism or production concept.
- name: vsm_relevance
  value: 4.0
  max_value: 5.0
  rationale: This entity maps well to S3 (internal regulation) as it represents a
    specific regulatory mechanism for government financial management, and potentially
    to S2 (coordination) as it affects how governments coordinate their financial
    obligations. It has clear operational relevance rather than being abstractly theoretical.
- name: explanatory_value
  value: 4.0
  max_value: 5.0
  rationale: The entity illuminates an important structural mechanism in government
    finance - how debt obligations can be contracted without dedicated repayment sources,
    creating specific fiscal dynamics and constraints. This explains a concrete governmental
    financial practice rather than merely naming a surface phenomenon.
---

# Evaluation: Unfunded Debt

## definition_precision — 4.0 / 5.0

The definition clearly distinguishes unfunded debt from funded debt by the absence of dedicated revenue streams, and specifies it includes short-term obligations and arrears. The definition is precise and non-circular, though it could be slightly more specific about the temporal aspects.

## source_grounding — 5.0 / 5.0

This concept is directly grounded in Smith's explicit discussion in Book V, Chapter 3, where he systematically distinguishes between funded and unfunded debt as fundamental categories of government borrowing. Smith clearly presents this as the first method governments use when contracting debt.

## domain_placement — 5.0 / 5.0

The "Regulation" domain is appropriate since this concerns government debt management and fiscal policy mechanisms. Unfunded debt represents a regulatory/administrative approach to government finance rather than a market mechanism or production concept.

## vsm_relevance — 4.0 / 5.0

This entity maps well to S3 (internal regulation) as it represents a specific regulatory mechanism for government financial management, and potentially to S2 (coordination) as it affects how governments coordinate their financial obligations. It has clear operational relevance rather than being abstractly theoretical.

## explanatory_value — 4.0 / 5.0

The entity illuminates an important structural mechanism in government finance - how debt obligations can be contracted without dedicated repayment sources, creating specific fiscal dynamics and constraints. This explains a concrete governmental financial practice rather than merely naming a surface phenomenon.
