Category: Legal Scholars Advance the Principle of Odious Debts

Ecuador’s Sovereign Default: A Pyrrhic Victory for Odious Debt?

(February 28, 2010) Ecuador’s strategic default on some of its external debt last year has drawn much commentary and generated passionate reactions. Some commentators who advocate creating a mechanism for addressing odious or illegitimate debt encouraged Ecuador to repudiate its obligations and have generally applauded its decision to do so. For those who are sympathetic to efforts to create such a mechanism, however, this enthusiasm may be misplaced.

New Estimates of Capital Flight from Sub-Saharan African Countries: Linkages with External Borrowing and Policy Options

(April 1, 2008) Over the past decades, African countries have been forced by external debt burdens to undertake painful economic adjustments while devoting scarce foreign exchange to debt-service payments. On the other hand, African countries have experienced massive outflows of private capital towards Western financial centers. Indeed, these private assets surpass the continent’s foreign liabilities, ironically making sub-Saharan Africa a “net creditor” to the rest of the world.

Why Aren’t We Developing Faster?

(March 4, 2008) According to Paul Wolfowitz, former President of the World Bank: World Bank’s beneficiary countries that do not have access to capital markets mostly “remain poor because their political system is unstable, private property rights are very limited, the judicial system is weak or subservient, or the Government is corrupt” and assistance to such countries “at best provides relief [and] at worst supports corruption or programs that waste scarce local and external resources”.

Contract, priority, and odious debt

(March 16, 2007) This Article proposes that sovereign nations and their creditors adopt a contractual approach to the seemingly intractable problem of odious debt. Odious debt is generally defined as an obligation incurred by a despotic or illegitimate leader that provides no value to the population of the sovereign.

Odious debt wears two faces: Systemic illegitimacy, problems and opportunities in traditional odious debt conceptions in globali

(January 17, 2007) This paper examines the way that the traditional notion of odious debt as a method of repudiating sovereign debt may undergo a conceptual revolution, as it changes focus from the illegitimacy of governments obtaining loans, to the illegitimacy of the systems through which such loans are made and enforced generally.

The Due Diligence Model: A New Approach to the Problem of Odious Debts

(January 3, 2007) Odious debts are debts incurred by a government without either popular
consent or a legitimate public purpose. There is a debate within
academic circles as to whether the successor government to a regime
that incurred odious debts has the right to repudiate repayment. In the
real world, however, repudiation is not currently an option granted
legitimacy by either global capital markets or the legal systems of
creditor states.