Why Not Default?: The Political Economy of Sovereign Debt

December 4, 2020
Why Not Default?: The Political Economy of Sovereign Debt

How creditors came to wield unprecedented power overheavily indebted countries—and the dangers this poses todemocracyThe European debt crisis has rekindled long-standing debatesabout the power of finance and the fraught relationship betweencapitalism and democracy in a globalized world. Why NotDefault? unravels a striking puzzle at the heart of thesedebates—why, despite frequent crises and the immense costs ofrepayment, do so many heavily indebted countries continue toservice their international debts?In this compelling and incisive book, Jerome Roos provides asweeping investigation of the political economy of sovereign debtand international crisis management. He takes readers from the riseof public borrowing in the Italian city-states to the gunboatdiplomacy of the imperialist era and the wave of sovereign defaultsduring the Great Depression. He vividly describes the debt crisesof developing countries in the 1980s and 1990s and sheds new lighton the recent turmoil inside the Eurozone—including the dramaticcapitulation of Greece's short-lived anti-austerity government toits European creditors in 2015.Drawing on in-depth case studies of contemporary debt crises inMexico, Argentina, and Greece, Why Not Default? paints adisconcerting picture of the ascendancy of global finance. Thisimportant book shows how the profound transformation of thecapitalist world economy over the past four decades has endowedprivate and official creditors with unprecedented structural powerover heavily indebted borrowers, enabling them to impose painfulausterity measures and enforce uninterrupted debt service duringtimes of crisis—with devastating social consequences andfar-reaching implications for democracy.