Selling Sovereignty: International Coercion, Debt Diplomacy, and Land Transactions

Description

What if countries cannot repay their loans to other countries? Our study re-evaluates
debt decisions in two important ways. First, we consider a debt management strategy
yet to be considered in political economy research: repaying sovereign loans with land.
Second, since our theoretical framework focuses on the distributional consequences of
debt management for domestic groups, we model the interdependencies across policy
choices. Using new data on land transactions, existing data on default, debt relief and
austerity, and simultaneous equation estimation, we find that countries with influential
financial groups address debt problems through austerity and land transactions to
prevent default. In contrast, governments influenced by labor groups are less likely to
implement austerity measures and tend to avoid land deals — but conversely are more
likely to default. Our study sheds light on how debtor governments attempt to protect
political sovereignty in a context of international pressure and debt diplomacy.

Period	22 Oct 2021 → 23 Oct 2021
Event title	Annual Meeting of the International Political Economy Society
Event type	Conference
Location	Boulder, United States, ColoradoShow on map
Degree of Recognition	International