Hardback
The Debt Crisis of the 1980s
Law and Political Economy
9781839103629 Edward Elgar Publishing
This book offers a novel account of the debt crisis which hit many developing countries, between 1982 and 1989. Its strong interdisciplinary approach brings together the financial, political and legal dimensions. It will be of major interest for those interested in the economic history of post-WWII decades, sovereign debt in general and financial multilateralism.
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Critical Acclaim
Contents
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This book offers a novel account of the significant debt crisis which hit many developing countries during the 1980s. It starts with the flawed cycle of bank lending during the 1970s, and then moves from the opening act, in Mexico in 1982, until a solution was found with the 1989 Brady Initiative.
The Debt Crisis of the 1980s also articulates closely the economic and financial dimensions alongside the political and multilateral ones. The key relation between debtor countries and the IMF is explored in detail, but the book also documents the tense and often coercive interactions with commercial banks as well as on the continuing resistance to the IMF-led strategy among G7 governments. How debt contracts were restructured during all those years helps understanding how the Brady Initiative worked in practice, and how it prepared the ground for the turn to global markets after 1990. This debt crisis was indeed one of the main incubators of globalisation. This underlines further its unique character in the long-run history of sovereign debts, before and after the 1980s.
Remarkably, this book rests on in-depth interviews with the key players. Transcripts are included for the six most important players, including the former heads of the US Federal Reserve and the IMF. Archives from the IMF, the New York Federal Reserve, the Bank of England and commercial banks have also been systematically exploited, often for the first time ever.
This narrative and analytical account of one of the biggest debt crises in history is addressed to students and researchers in economics, international history, political economy and socio-legal studies. It will additionally be of value for professional economists and lawyers working on sovereign debts.
The Debt Crisis of the 1980s also articulates closely the economic and financial dimensions alongside the political and multilateral ones. The key relation between debtor countries and the IMF is explored in detail, but the book also documents the tense and often coercive interactions with commercial banks as well as on the continuing resistance to the IMF-led strategy among G7 governments. How debt contracts were restructured during all those years helps understanding how the Brady Initiative worked in practice, and how it prepared the ground for the turn to global markets after 1990. This debt crisis was indeed one of the main incubators of globalisation. This underlines further its unique character in the long-run history of sovereign debts, before and after the 1980s.
Remarkably, this book rests on in-depth interviews with the key players. Transcripts are included for the six most important players, including the former heads of the US Federal Reserve and the IMF. Archives from the IMF, the New York Federal Reserve, the Bank of England and commercial banks have also been systematically exploited, often for the first time ever.
This narrative and analytical account of one of the biggest debt crises in history is addressed to students and researchers in economics, international history, political economy and socio-legal studies. It will additionally be of value for professional economists and lawyers working on sovereign debts.
Critical Acclaim
‘This exquisitely timed and important book returns a twice-lost decade to its rightful place in sovereign debt theory and practice. An urge to forget for some combined with endless casual mentions to drain the 1980s of color and meaning in contemporary imagination. In place of generic cutouts of systemic crisis, deadweight loss, oppression, and financial alchemy, Jérôme Sgard offers an original account of institutional ferment, creative agency, and fraught politics at the root of international financial architecture.’
– Anna Gelpern, Georgetown University Law Center, Washington DC, US
‘The Debt Crisis of the 1980s: Law and Political Economy stands as the definite account of the 1980s debt crisis. Carefully written and thoroughly researched, it is a must read for anyone interested in the subject. As new political lenders put the post-1980s debt restructuring architecture under pressure, reading Sgard is as vital as it is urgent.
– Marc Flandreau, University of Pennsylvania, US
‘This is an excellent book. It is by far the most illuminating account of the 1980s debt crisis that I have read. A first-rate work of historiography, drawing on new written and oral sources. Essential to understanding the birth of the IMF as a debt crisis manager, with implications for today and the future.’
– Jeromin Zettelmeyer, Bruegel, Belgium
‘After every major historical event there will be a period of time - a necessarily limited period of time - in which a chronicler will be far enough away from the event to permit a critical assessment of what happened but close enough in time that the principal actors in the drama remain available for oral interviews. For the global sovereign debt crisis of the 1980s, Professor Sgard has hit that temporal sweet spot perfectly. His meticulous historical research is enlightened by the personal recollections of many of the individuals who directed and endured those events.’
– Professor (Hon.) Lee C. Buchheit, University of Edinburgh Law School, UK
‘Jérôme Sgard’s book is both timely, well researched and enjoyable. It offers an insightful analysis of the first sovereign debt crisis of the post-WWII era, combining different original perspectives. Beyond the economic and financial dimensions, it covers accounting, prudential, legal and sociological angles, as well as highlighting leadership. It helps the reader meditate on the lessons to draw to better handle the current crisis.’
– Pierre Cailleteau, Banque Lazard, Paris, France
– Anna Gelpern, Georgetown University Law Center, Washington DC, US
‘The Debt Crisis of the 1980s: Law and Political Economy stands as the definite account of the 1980s debt crisis. Carefully written and thoroughly researched, it is a must read for anyone interested in the subject. As new political lenders put the post-1980s debt restructuring architecture under pressure, reading Sgard is as vital as it is urgent.
– Marc Flandreau, University of Pennsylvania, US
‘This is an excellent book. It is by far the most illuminating account of the 1980s debt crisis that I have read. A first-rate work of historiography, drawing on new written and oral sources. Essential to understanding the birth of the IMF as a debt crisis manager, with implications for today and the future.’
– Jeromin Zettelmeyer, Bruegel, Belgium
‘After every major historical event there will be a period of time - a necessarily limited period of time - in which a chronicler will be far enough away from the event to permit a critical assessment of what happened but close enough in time that the principal actors in the drama remain available for oral interviews. For the global sovereign debt crisis of the 1980s, Professor Sgard has hit that temporal sweet spot perfectly. His meticulous historical research is enlightened by the personal recollections of many of the individuals who directed and endured those events.’
– Professor (Hon.) Lee C. Buchheit, University of Edinburgh Law School, UK
‘Jérôme Sgard’s book is both timely, well researched and enjoyable. It offers an insightful analysis of the first sovereign debt crisis of the post-WWII era, combining different original perspectives. Beyond the economic and financial dimensions, it covers accounting, prudential, legal and sociological angles, as well as highlighting leadership. It helps the reader meditate on the lessons to draw to better handle the current crisis.’
– Pierre Cailleteau, Banque Lazard, Paris, France
Contents
Contents: Introduction: the 1980s debt crisis in historical perspective 1 Inventing conditionality, exploring its politics (1946–1958) 2 The shortest sovereign debt cycle in history: 1973–1982 3 1982 4 The rules of the game: negotiation, enforcement, contestation 5 Multilateralism and legal ordering 6 Adjustment, inflation, investment 7 1987 8 Brady’s ways Conclusion: hindsight and foresight Testimonies: Paul A. Volcker, Jacques de Larosière, William R. (‘Bill’) Rhodes, Guillermo Ortiz, José Ángel Gurría, Charles Dallara, Index
