A Different Kind of Restructuring: Forty Years of Debate and the Prospect of a Formal International Sovereign Debt Regime

Aidan W. McConnell, University of Pennsylvania

Abstract

This thesis will examine how the organization of creditors and debtors within an ad hoc sovereign debt framework affects the prospect of establishing a formal international mechanism for debt disputes. Since sovereign debtors are not bounded by the same constraints and guarantees as domestic actors, crisis-driven political battles and case-by-case compromises between creditor interests and indebted countries are the ideal building blocks for constructing a picture of the contemporary debt regime. A review of sovereign debt disputes between the 1970s and the present day – corresponding to the North-South Dialogue, the Latin American debt crisis of the 1980s, the International Monetary Fund’s Sovereign Debt Restructuring Mechanism proposal, and Argentina’s 2014 default – indicates that a formal sovereign debt regime is unlikely to arise in the current bond-dominated atmosphere. In particular, the dominance of retail investors and other private bondholders, combined with stagnated or waning influence among public entities such as the IMF and the Paris Club, relegates the concept of a formal, permanent debt arbiter to an aspirational status.

Discipline(s)

Economic Policy | Finance | International Economics | International Relations | Political Economy

Suggested Citation

McConnell, Aidan W., "A Different Kind of Restructuring: Forty Years of Debate and the Prospect of a Formal International Sovereign Debt Regime" 01 January 2016. CUREJ: College Undergraduate Research Electronic Journal, University of Pennsylvania, https://repository.upenn.edu/curej/197.