Repudiation and Repression: The Human Costs of Sovereign Default

Stephen Bagwell ()
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Stephen Bagwell: Department of Political Science, University of Missouri, St. Louis, MO 63121-4400, USA

Social Sciences, 2023, vol. 12, issue 3, 1-13

Abstract: Sovereign default has myriad economic and political consequences. Existing research, however, has not explored the human costs of sovereign default, though some link the fiscal flexibility afforded by sovereign creditworthiness to improved human rights performance. But what are the consequences when sovereigns lose all creditworthiness and default on their debt obligations? I argue that while the average effect of default is negative for respect for physical integrity rights, a conditional effect exists. When states devote more of their resources to debt service and default, they are likely to see a short term increase in respect for physical integrity rights. I find robust support for these arguments using panel data on over 90 developing countries from 1981–2010.

Keywords: debt service; sovereign debt; human rights; risk management; physical integrity rights (search for similar items in EconPapers)
JEL-codes: A B N P Y80 Z00 (search for similar items in EconPapers)
Date: 2023
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