Abstract:
Current interest in the problem of “odious debt” is intertwined with other problems that afflict many developing and emerging market countries: despotic governments, unsustainable external debt burdens, and large-scale official corruption. If the universe of odious debt cases is relatively small, then it is likely uneconomical to develop an extensive legal apparatus ex ante. If the universe of odious debt cases is relatively large, it is very likely because the definition is so broad as essentially to create a special legal regime for lending to sovereigns. Even assuming such a special regime to be desirable, it is almost surely better to create it directly, rather than by stretching beyond recognition the original concept of odious debt. If the universe of odious debt cases falls somewhere between these points, then it likely overlaps substantially with the larger problems of despotism, unsustainable debt, or corruption. In that circumstance, it may be preferable – as a matter of law and politics – to focus on responses to those larger problems. Thus, even though an elaborated doctrine of odious debt may not be advisable, the concept is a potentially effective organizing principle for generating the political will to address these other persistent, debilitating problems.Read full paper here