Institutional Interaction in Sovereign Debt Restructuring

• In Event: Navigating Institutional Complexity in World Politics

Abstract

The research program on regime complexity compares clusters of institutions across different issue areas. This paper tests hypotheses derived from the theory of complexity that emphasizes hierarchy and differentiation by examining the restructuring of official debt of emerging market and developing countries. Specifically, it examines interaction among the institutions and other actors that are engaged in official debt restructuring – principally but not exclusively the IMF, Paris Club and official bilateral creditors – and the evolution of the complex over time. It also addresses the effects of changes in hierarchy and differentiation among the institutions on the timing, depth and effectiveness of debt-restructuring agreements. The analysis draws on archives, documents and interviews to map institutional interaction and on official debt data to assess restructuring agreements. The rise of China as a principal bilateral creditor and the looming defaults for many low-income countries in the aftermath of the covid-19 pandemic give the subject some urgency.

Author

• C. Randall Henning, American University-SIS