Date Published:
Dec 1, 2011
Abstract:
This paper measures “debt disputes” between governments and
foreign private creditors in periods of sovereign debt crises. We
construct an index of government coerciveness, consisting of 9
objective sub-indicators. Each of these sub-indicators captures
unilateral government actions imposed on foreign banks and
bondholders. The results provide the first systematic account of
debt crises that goes beyond a binary categorization of default
versus non-default. Overall, government behavior and rhetoric
show a strong variability, ranging from highly confrontational to
very smooth crisis resolution processes. In a preliminary analysis
on the determinants of coercive behavior, we find political institutions
to be significant, while economic and financial factors play
a lesser role. These results open up an agenda for future research.
Notes:
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