Examining the framework of sovereign debt restructuring

Countries faced with a punishing and ad hoc regime

Shafic Osman

Financing a budget is a pressing challenge for countries in the global south. Like corporations, countries can raise financing for budgetary spending by contracting debt. Such debt, sovereign debt, imposes on a nation state a financial duty to repay creditors enforceable at law. The duty arising between the state and its creditors may be grounded in contract law or international law. Despite the existence of some frameworks to govern sovereign debt, international public finance demonstrates the inadequacy of customary law, treaties, and contract law to govern sovereign debts.