A Focus on Creditors and Odious Debt

Zusammenfassung

The extensive literature devoted to sovereign debt, by and large, does not offer a comprehensive account of the range of different contractual relations that are encompassed by the term ‘sovereign debt.’ While reputation is widely accepted to play a dominant role in sustaining creditor-debtor relations in the international sphere, the strength of its role and the degree to which it is obstructed, vary from one type of sovereign debt relation to another. The aim of this Chapter, therefore, is to address the distinct relationships that different creditors have with sovereign debtors. Although they all fall within the umbrella heading of “sovereign debt” and have in common a promise to repay, beyond that they differ substantially in form and substance. The incentives and interests of the parties differ in each type of relationship, as does the role of reputation. Some relationships are characterized by arm’s length transactions sustained by a debtor’s reputation to repay. In others, the reputation mechanism is obstructed by outside factors such as hegemonic interests and influences. Less transparent creditor-debtor exchanges also exist, where reputation is based not on whether a debtor repays, but on whether it cedes policy control, or provides access to strategic resources. Still others are based more on dependency and control than on reputation at all.