Sovereign Debt Diplomacies : Rethinking Sovereign Debt From Colonial Empires to Hegemony

This is an open access title available under the terms of a CC BY-NC-ND 4.0 International licence. It is free to read at Oxford Scholarship Online and offered as a free PDF download from OUP and selected open access locations. Sovereign Debt Diplomacies aims to revisit the meaning of sovereign debt in relation to colonial history and postcolonial developments. It offers three main contributions. The first contribution is historical. The volume historicises a research field that has so far focused primarily on the post-1980 years. A focus on colonial debt from the 19th century building of colonial empires to the decolonisation era in the 1960s-70s fills an important gap in recent debt historiographies. Economic historians have engaged with colonialism only reluctantly or en passant , giving credence to the idea that colonialism is not a development that deserves to be treated on its own. This has led to suboptimal developments in recent scholarship. The second contribution adds a 'law and society' dimension to studies of debt. The analytical payoff of the exercise is to capture the current developments and functional limits of debt contracting and adjudication in relation to the long-term political and sociological dynamics of sovereignty. Finally, Sovereign Debt Diplomacies imports insights from, and contributes to the body of research currently developed in the Humanities under the label 'colonial and postcolonial studies'. The emphasis on 'history from below' and focus on 'subaltern agency' usefully complement the traditional elite-perspective on financial imperialism favoured by the British school of empire history. Cover Sovereign Debt Diplomacies: Rethinking Sovereign Debt from Colonial Empires to Hegemony Copyright Acknowledgements Contents List of Figures List of Tables List of Contributors Introduction: Sovereign Debt Diplomacies I.1 Debts, Defaults, Disputes I.2 Sovereign Debt Diplomacies I.3 Analytical and Methodological Contributions References 1: Rethinking Sovereign Debt from Colonial Empires to Hegemony 1.1 Imperial Solutions to Sovereign Debt Crises (1820–1933) 1.2 Debt Disputes in the Age of Financial Repression: When Repayment Takes a Backseat (1933–70s) 1.3 Postcolonial Transitions and the Hopes for a New International Economic Order (1960s–80s) 1.4 Post–Cold War Sovereign Debt Disputes: Hegemony or Fragmentation? 1.5 Organization of the Volume Imperial Debt Diplomacies (1820–1933) Interstate Debt Diplomacies (1933–70s) Postcolonial Debt Diplomacies (1960s–80s) Hegemonic Debt Diplomacies? (1990s–present) References Section 1: Imperial Solutions To Sovereign Debt Crises (1820–1933) 2: Sovereignty and Debt in Nineteenth-Century Latin America 2.1 Introduction 2.2 Sovereign Debt and Theoretical Debates on Dependency and Informal Empire 2.3 Sovereign Debt as a Control Mechanism 2.4 Legal Tools and Foreign Interventions Diplomatic Conventions: Mexico, 1861 Direct Contracting: Peru, 1890 Sovereign Debt Enters International Law: Venezuela, 1902 2.5 Conclusion: The Law and Economics of Foreign Interventions in the Aftermath of Debt Defaults References 3: Foreign Debt and Colonization in Egypt and Tunisia (1862–82) 3.1 Introduction 3.2 First International Borrowing 3.3 Default and International Financial Commissions 3.4 From International Financial Control to Colonization 3.5 Conclusion References 4: Independence and the Effect of Empire: The Case of ‘Sovereign Debts’ Issued by British Colonies 4.1 Introduction 4.2 Implicit Guarantee Mechanism 4.3 Data and Methodology 4.4 Results and Discussion Baseline Results Australian Debt Crisis Indian Independence Pressures 4.5 Conclusion References Appendix Section 2: Debt Disputes In The Age Of Financial Repression: When Repayment Takes A Backseat (1933–70s) 5: The Fortune of Geopolitical Conditions in Debt Diplomacy: Mexico’s Long Road to the 1942 Foreign Debt Settlement 5.1 Introduction 5.2 An Attempt to Frame the Story 5.3 The Point of Departure in the Mexican Story 5.4 The Beginning of a Difficult Path for Negotiations 5.5 The Pani–Lamont Amendment 5.6 The Montes de Oca–Lamont Agreement 5.7 Second Stage: From the Impasse to the Beginning of Bilateral Agreements 5.8 Debt Diplomacy: Negotiation of the Debt for the 1942 and 1946 Agreements References 6: The Multilateral Principle-Based Approach to the Restructuring of German Debts in 1953 6.1 Introduction 6.2 The Road to Official Recognition of Pre–Second World War Debts 6.3 Principles and Procedure of the LDA Principles (I): Capacity to Pay Principles (II): Equality of Treatment 6.4 The Multilateral Principles-Based Approach to German Debts at Work 6.5 Conclusion References Archives 7: The Revenge of Defaulters: Sovereign Defaults and Interstate Negotiations in the Post-War Financial Order, 1940–65 7.1 Introduction 7.2 The Political Economy of Debt Dispute Settlement: A Long-Term Perspective 7.3 When Debt Repayment Takes the ‘Backseat’ 7.4 Bumpy Legal Roads Towards Repayment 7.5 Inter-Period Performance Assessment 7.6 Conclusion Sources References Section 3: Postcolonial Transitions And The Hopes For A New International Economic Order (1960s–80s) 8: We Owe You Nothing: Decolonization and Sovereign Debt Obligations in International Public Law 8.1 Introduction 8.2 A Contradictory Task: Codification in the Age of Decolonization 8.3 Boundary Crossing Between Private and Public International Law 8.4 Reversible Identities between Creditor and Debtor States 8.5 Conclusion Bibliography 9: Decolonization and Sovereign Debt: A Quagmire 9.1 Introduction 9.2 Universal Succession Versus Clean Slate 9.3 The Quagmire of State Practice 9.4 A Perennial Quagmire? 9.5 Conclusion Bibliography 10: The Global South Debt Revolution That Wasn’t: UNCTAD from Technocractic Activism to Technical Assistance 10.1 Introduction 10.2 Negotiating Debt at UNCTAD in the 1970s: A Tale of Two Competing Narratives The View From the Global South Countries: Institutional Remedies for Structural Debt Problems The View From Western Countries: Technical Remedies for Domestic Debt Problems 10.3 ‘Downstream’ Expertise Boundaries and the Individualization of Debtor Nations When ‘Entrepreneurial Bureaucrats’ Engage in Debt Politics Disentangling the Technical Assistance from Political Claims When the Debt Branch Strikes Back 10.4 Conclusion References Section 4: The Legalization Of Sovereign Debt Disputes Between Wish And Reality (1990s–Present) 11: Placing Contemporary Sovereign Debt: The Fragmented Landscape of Legal Precedent and Legislative Pre-emption 11.1 Introduction 11.2 Bringing Place Back In 11.3 Litigation, Legislation, Location Background: Holdout Litigation in the 1990s The Injunctive Remedy in Argentina’s Battle in US Courts Resolution Repercussions of the Legal Battle The UK’s Debt Relief Act of 2010 The Belgian Anti-Vulture Fund Law France’s Sapin II 11.4 Connecting the Dots: Local Laws, Global Reach, Ov 11.5 Conclusion References 12: Maduro Bonds 12.1 Introduction 12.2 Hunger Bonds and the Hausmann Effect 12.3 Some Possible Legal Challenges to Future Maduro Bonds Misbehaving Agent Unauthorized Transaction 12.4 Democracy, Corruption, and Sovereign Spreads 12.5 Conclusion References 13: Contract Provisions, Default Risk,and Bond Prices: Evidence from Puerto Rico 13.1 Introduction Main Findings Background on Puerto Rico’s Crisis and Puerto Rican Debt Puerto Rico and the Problem of Quasi-Sovereignty Related Literature 13.2 Background on Puerto Rican Debt COFINA Debt PROMESA New York Law Debt 13.3 The Pricing of GO and COFINA Debt 13.4 The Pricing of PROMESA 13.5 The Pricing of New York Law Debt 13.6 Conclusion Appendix A.1. Puerto Rican Debt Summary A.2. Data Appendix: Section 3 References Concluding Remarks. (Neo)Colonialism, (Neo)Imperialism, and Hegemony: On Choosing Concepts in Sovereign Debt References Index