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Rethinking odious debt in the age of predatory lending: Old ideas for new problems

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  • Penet, Pierre

Abstract

This essay suggests that odious debt needs a restatement to stay relevant in the face of important changes affecting state (i.e. “sovereign”) debt. Today, a major issue affecting creditor-debtor relations in the sovereign sector is the predicament of over-lending. Examples abound of reckless creditors pressuring vulnerable states to borrow for projects they do not need and at conditions they do not fully understand. This development, which recalls the aggressive business tactics used by predatory lenders in consumer lending, has become a ubiquitous problem affecting both developing and developed nations. Yet, this problem remains largely unaccounted for in international law and in the odious debt doctrine in particular. The future of odious debt depends upon a collective endeavor to make the legal doctrine more sensitive to issues of predatory lending. This essay offers insights into the benefits that such efforts may yield on states and their creditors.

Suggested Citation

  • Penet, Pierre, 2018. "Rethinking odious debt in the age of predatory lending: Old ideas for new problems," Working Papers unige:102988, University of Geneva, Paul Bairoch Institute of Economic History.
    • Handle: RePEc:gnv:wpaper:unige:102988
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    References listed on IDEAS

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    1. Nehru , Vikram & Thomas, Mark, 2008. "The concept of odious debt : some considerations," Policy Research Working Paper Series 4676, The World Bank.
    2. Flores, Juan H., 2011. "Information asymmetries and conflict of interest during the Baring crisis, 1880–18901," Financial History Review, Cambridge University Press, vol. 18(2), pages 191-215, August.
    3. Marc Flandreau & Norbert Gaillard & Ugo Panizza, 2009. "Conflicts of Interest, Reputation and the Interwar Debt Crisis: Banksters or Bad Luck?," IHEID Working Papers 02-2010, Economics Section, The Graduate Institute of International Studies, revised Feb 2010.
    4. Carmen M. Reinhart & Christoph Trebesch, 2015. "The Pitfalls of External Dependence: Greece, 1829–2015," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 46(2 (Fall)), pages 307-328.
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    More about this item

    Keywords

    International Law; Odious debt; Greece; Predatory lending; Colonial history;
    All these keywords.

    JEL classification:

    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F54 - International Economics - - International Relations, National Security, and International Political Economy - - - Colonialism; Imperialism; Postcolonialism
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • H74 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Borrowing

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