EconPapers    
Economics at your fingertips  
 

Sanctions and incentives to repudiate external debt

Carlo de Bassa, Edoardo Grillo and Francesco Passarelli
Additional contact information
Carlo de Bassa: Collegio Carlo Alberto, Torino, Italy
Francesco Passarelli: Università di Torino, Turin, Italy

Journal of Theoretical Politics, 2021, vol. 33, issue 2, 198-224

Abstract: Often foreign countries levy sanctions in the attempt to foment discontent with a hostile government. But sanctions may provoke costly reactions by the leaders of the target country. This paper presents a model in which sanctions exhaust the target country economically and impair its government’s fiscal capacity. Then, an office-motivated leader may find it convenient to default on foreign debt in order to free resources that she can invest to regain internal political support. The default thus becomes a defensive tool to partially dampen the internal political turmoil sanctions generate.

Keywords: political unrest; sanctions; external debt crisis (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/0951629820984851 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:jothpo:v:33:y:2021:i:2:p:198-224

DOI: 10.1177/0951629820984851

Access Statistics for this article

More articles in Journal of Theoretical Politics
Bibliographic data for series maintained by SAGE Publications ().

 
Page updated 2022-06-25
Handle: RePEc:sae:jothpo:v:33:y:2021:i:2:p:198-224