A country's First or Third World status doesn't really matter, except that a basic implication of being Third World is that one's economy cannot support adequate standards of living for one's people and that one's currency is considered fairly weak. Running large public deficits would seem to be difficult in that situation simply because there isn't a huge market for your bonds.
In that environment, it is typical to seek foreign aid in the form of loans, which are used to invest in production capacity to improve your ability to deliver goods and services to your people, boosting your economy and eventually allowing you to be productive enough to repay the loans with currency earned through trade.
If you instead spend the loan money on buying food and other consumables, you are, as I said a few pages back, doing the equivalent of a consumer putting grocery purchases on the credit card. You aren't improving your ability to repay the loans you're taking out, so they keep piling up, and the loans aren't in your own currency so you can't just create money to pay them off.
Your best bet in this situation is to attempt to devalue your currency to make your products more competitive in foreign trade, hoping to run a large enough surplus to stay afloat. If you cannot do this, then your economy eventually collapses in debt. Even if you do try it, you'll run the risk of entering a hyperinflationary death spiral.
edited 20th Mar '14 11:43:56 AM by Fighteer