The Economics and Law of Sovereign Debt and Default
Journal of Economic Literature
no. 3, September 2009
This paper surveys the recent literature on sovereign debt and relates it to the evolution
of the legal principles underlying the sovereign debt market and the experience
of the most recent debt crises and defaults. It finds limited support for theories that
explain the feasibility of sovereign debt based on either external sanctions or exclusion
from the international capital market and more support for explanations that
emphasize domestic costs of default. The paper concludes that there remains a case
for establishing institutions that reduce the cost of default but the design of such
institutions is not a trivial task.
Panizza, Ugo, Federico Sturzenegger, and Jeromin Zettelmeyer.
"The Economics and Law of Sovereign Debt and Default."
Journal of Economic Literature,
International Lending and Debt Problems
International Linkages to Development; Role of International Organizations
Socialist Institutions and Their Transitions: International Trade, Finance, Investment, and Aid