The global financial system needs to look beyond loans to avoid future train wrecks. Greek negotiators and their European counterparts have blinked, having tiptoed up to the cliff of European disunion and decided not to take the plunge. Global markets have exhaled in relief as a result of a deal announced Monday that buys Greece more time to turn things around and pay its debts.

What's depressing is we will likely see this drama play out again. There may be elements to this story that are particular to the dynamics of the Eurozone, but there is a more fundamental, less discussed, problem that needs resolving: the excessive reliance of nations on debt as a means of financing their development.

The Greek debt crisis is so similar to other debt crises of the past it's haunting. Developing countries load up on loans from over-eager banks and other creditors based on rosy growth projections that do not materialize. Unable to meet their repayment obligations, they default or seek debt forgiveness. If the crisis is big and systemic, other governments and multilateral financial institutions (in this case, the European Central Bank and the International Monetary Fund) bail out banks trying to prevent a financial crisis that may cause large economic disruption. Pundits on both sides make loud noises. There is a usually a "moral hazard" camp arguing against any bailouts, opposed by an "extraordinary times require extraordinary measures" faction eager to do what it takes to avoid ruinous financial contagion. Rewind, pause, repeat.

The fundamental problem is an excessive reliance on debt as the method to finance public spending. Such inflexible IOU's shouldn't be the only means available for sovereign nations to raise capital to invest in their development. Like enterprises in the private sector, sovereign states should also be able to raise equity funding, which involves selling a stake in their future to investors eager to participate in, and benefit from, their success. This would give these states more room to maneuver when times get tough, and give their creditors a better return when things go well.

Short of selling shares in individual state-owned enterprises, there are surprisingly few avenues for sovereign nations and investors to partner up, and there is no good reason for Uber and other start-ups to have more financing options than an emerging sovereign nation does.

A traditional loan requires a fixed repayment, regardless of circumstances. Lenders have generally looked to government debt as a relatively safe investment, which is why so many pension funds and individual investors in this country choose to invest in municipal bonds and Treasury bills.

That's the theory, of course, but as the Greek case shows, the international financial system has gone too far in privileging debt over other financing options, with utterly predictable results. Once again, creditors and borrowers -- not to mention the people of Greece and elsewhere in Europe who weren't in on the decision to enter into these agreements -- are entangled in a messy and destabilizing drama emanating from a supposedly unimaginable default. Equity-like deals, where investors fully become invested in a country's fate, are often made only after a costly default process, when some investors acquire "bad debt," after a default.

It would be far better to design an equity-like, risk-sharing arrangement between sovereign states and creditors from the outset, in which the required repayment were automatically lowered in bad times and scaled up in good times. For example, the repayments could be linked GDP growth, or to market prices of commodities that a country exports.

We should think of small, growing countries such as Greece (whose performance was healthy prior to the financial crisis, recession, and austerity of recent years) the way we think of promising, but volatile, tech start-ups. A more diversified approach to sovereign financing would provide growing nations with natural shock absorbers and their creditors wo uld profit handsomely in good years.

Regardless of what happens in Greece, a co ntinued overreliance on debt to finance the expansion of developing economies will only mean that the next time -- and there will be a next time -- will be no different.

Bhagwan Chowdhry is a professor of finance at the UCLA Anderson School of Management and co-founder of the Financial Access at Birth initiative. He wrote this for Zócalo Public Square.