This paper examines the causes, process, and outcome of Belize’s 2016–17 sovereign debt restructuring – its third episode in last 10 years. As was the case in the earlier two restructurings, in 2006-07 and in 2012-13, the 2016-17 debt restructuring was executed through collaborative...

During the pandemic, public debt in Latin America and the Caribbean rose to more than 70 percent of GDP, and countries are now attempting to lower debt ratios. We analyze past debt reduction episodes and find inflation and the real interest rate were the most frequent main drivers, while higher...

We document that creditor losses ("haircuts") during sovereign debt restructurings vary across debt maturity. In our novel dataset on instrument-specific haircuts suffered by private creditors in 1999-2020 we find larger losses on short- than long-term debt, independently of the specific haircut...

This paper studies whether countries benefit from servicing their debts during times of widespread sovereign defaults. Colombia is typically regarded as the only large Latin American country that did not default in the 1980s. Using archival research and formal econometric estimates of Colombia's...

This paper analyzes the effects of including collective action clauses (CACs) and enhanced CACs in international (nondomestic law-governed) sovereign bonds on sovereigns’ borrowing costs, using secondary-market bond yield spreads. Our findings indicate that inclusion of enhanced CACs,...

This study highlights the role of political leadership in external debt management by translating its effectiveness into economic growth. We use data from World Development Indicators (2018), Archigos (version 4.1) for Goemans et al. (2009) and Scartascini et al. (2021) from 1975 to 2019. The...

International financial institutions (IFIs) generally enjoy preferred creditors treatment (PCT). Although PCT rarely appears in legal contracts, when sovereigns restructure bilateral or commercial debts, they normally pay IFIs in full. This paper presents a model where a creditor, such as an...

According to the IMF, the current public debt makes up nearly 40 percent of the global debt, marking the highest share since the mid-1960s. Despite the vast research on alarming levels of sovereign default, the literature remains inconclusive. This paper investigates macroeconomic, financial,...

The purpose of this study was to investigate the impact of domestic and external debt on macroeconomic variables in Nigeria from 1981 to 2020. Annual secondary data on domestic and external debt, inflation, output, investment and consumption sourced from World Development Indicators (WDI, 2021),...

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