Sovereign debt

Sovereign debt is debt owed by the government of a sovereign country either to residents or non-residents. Sovereign debt problems have been a major public policy issue since World War II, including the treatment of debt related to that war, the developing country “debt crisis” in the 1980s, and the shocks of Russia’s default in 1998 and Argentina’s default in 2001. For a comprehensive discussion of the procedures that have evolved for resolving the problems of governments that have defaulted on their contractual debt obligations, see: Restructuring Sovereign Debt: the Case for Ad Hoc Machinery, by Lex Rieffel, Brookings Institution Press, 2003.