RETHINKING SOVEREIGN DEBT RETHINKING SOVEREIGN DEBT Politics, Reputation, and Legitimacy in Modern Finance Odette Lienau harvard university press Cambridge, Massachusetts London, England 2014 Copyright © 2014 by the President and Fellows of Harvard College All rights reserved Printed in the United States of America Library of Congress Cataloging-in-Publication Data Lienau, Odette, 1978– Rethinking sovereign debt : politics, reputation, and legitimacy in modern fi nance / Odette Lienau pages cm Includes bibliographical references and index ISBN 978-0-674-72506-5 Debts, Public—Case studies Debt cancellation—Case studies I Title HJ8015.L54 2014 336.3'4—dc23 2013020190 For my parents and Aziz Contents Open Questions in Sovereign Debt Theoretical Underpinnings of Modern Finance 20 Costly Talk? Reinterpreting the Soviet Repudiation 57 Costa Rica, Public Benefit, and the Rule of Law 100 Public and Private Capital in Mid-Century Repayment Norms 124 Continuity and Consolidation in the Return of Private Finance 154 Legitimacy and Debt at the Turn of the Century 193 Politics and Prospects 226 Notes 241 Acknowledgments Index 321 319 RETHINKING SOVEREIGN DEBT .. .RETHINKING SOVEREIGN DEBT RETHINKING SOVEREIGN DEBT Politics, Reputation, and Legitimacy in Modern Finance Odette Lienau harvard university press Cambridge, Massachusetts London, England... Rethinking sovereign debt : politics, reputation, and legitimacy in modern fi nance / Odette Lienau pages cm Includes bibliographical references and index ISBN 97 8-0 -6 7 4-7 250 6-5 Debts, Public—Case... an understanding I begin by fi lling out the analytical problems with the conventional approach to sovereign continuity in debt and reputation, and identify opposing “statist” and “non-statist”