Odious Debts

A Convenient Untruth: Fact and Fantasy in the Doctrine of Odious Debts

Sarah Ludington & Mitu Gulat
Virginia Journal of International Law
January 1, 2008

History has been kind to Alexander Nahum Sack kinder than life was, and kind rather than accurate. Unknown for much of his life and the half century that followed it, he has, in the years since the 2003 United States incursion into Iraq, emerged as an international academic superstar. In 1927, while lecturing in Paris, Sack published a treatise in French on the effect of state transformations on public debt: Les Effets des transformations des Etats sur leurs dettes publiques et autres obligations financieres (Les Effets). Sack proposed that, following a state succession, a new sovereign government could renege on the odious debts of the previous sovereign. According to Sack, odious debts were those (a) incurred without the consent of the people (by a “despotic” re-gime); (b) from which no benefits accrued to the people; and (c) when the creditors had knowledge of the foregoing.

Sack’s treatise, which was never translated into English, has been discovered and placed at the center of a heated academic and policy debate—much of it in English—over the law of odious debts. His hitherto obscure theory has been discussed in the pages of The New Yorker, Le Monde, and The Times, not to mention dozens of other news sources, policy briefs, academic essays, and blogs.

In particular, Sack’s three-part definition has found favor with the contemporary proponents of an odious debts doctrine. Among debt forgiveness circles, Sack is described in one of several ways, which this article refers to as the Sackian myths: Sack is called a former Minister to Tsar Nicholas II or a former tsarist minister; a Russian jurist or a professor of law in Paris; and the preeminent legal scholar on public debts, The originator of the odious debts doctrine, or a leading scholar of international law. Sack’s name has become so ubiquitous in the literature that one sees references to the “Sackian view” of odious debts, and one modern writer described him as the “crowned prince” of advocates of the legal principle of odious debts. Sack’s theory is the starting point for almost every discussion of the odious debts problem today; until recently, his contemporaries writing on the subject merited nary a mention.

Why has the odious debts movement invested such weight in the re-
sume of one hitherto obscure legal scholar? And further, how and why did Sack’s iconic status arrive so suddenly and with so little biographical information about the man? Scholars typically achieve iconic status—of the sort where they are invoked by name as a source of authority—only after years of discussion and debate about their work.

The answer lies partly in a quirk of customary international law. Sack’s prominence—particularly his status as a minister in the tsarist government—lends authority to his doctrine of odious debts and buttresses the claims of its proponents that such a doctrine exists as part of customary international law. The “teachings of the most highly qualified publicists”11—which include the writings of prominent scholars in international law—are among the secondary sources of authority that customary international law recognizes, and thus Sack’s eminence is directly linked to a desire to validate his doctrine of odious debts.

It turns out that much of Sack’s contemporary identity was made up, but not by him. After a brief background discussion on the resurrection of Sack by the odious debts movement, this Article sets out the three Sackian mythologies told by the contemporary odious debts literature

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