Political economy of sovereign debt restructuring.

Summary This thesis analyzes external debt restructuring episodes that have occurred since 2000. We begin in the first chapter by presenting the episodes of private external debt restructuring that sovereigns have faced between 2014 and the present. This allows us to draw out the main features of recent events, in particular the shift in the type of instruments restructured to Eurobonds, the increased fragmentation of creditor bases to which collective action clauses have provided a response, as well as the quantification of losses incurred by creditors. We then turn, in the next two chapters, to the pattern of restructurings in one of the largest lenders to governments: China. We begin by gathering descriptive evidence through a case study analysis that allows us to identify salient facts, in particular the distinction between two restructuring methods: nominal haircuts and debt rescheduling. We then turn to a formalized approach by compiling a new database of Chinese restructuring episodes since 2000. We perform a statistical analysis via a Jordà model that finds a significant reduction in Chinese loans to governments after debt rescheduling. Finally, in light of the current COVID-19 crisis, we focus on African sovereigns. After presenting the evolution of their debt patterns, we focus on the risks of future restructuring episodes. We conclude by presenting options that could prove effective.