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N° 2004-21 |
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| December 2004 |
| IMF in Theory: Sovereign Debts, Judicialisation
and Multilateralism |
| Jérôme Sgard |
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| It is argued that the successive regimes
for restructuring sovereign debts, since the early 20th century have been shaped
by the articulation of three institutional functions: information gathering and
economic expertise, then third-party mediation, lastly policy enforcement, also
called conditionality. Whereas these functions where integrated within the Fund
during the 1980s’ debt crisis, mediation has now been outsourced, under
the pressure of the demand by the private sector for a thorough judicialisation
of the restructuring process. That is, its inscription within rather rigid procedural
rules which would provide much more protection against the interests and the intervention
of the sovereigns, especially G7 governments. Two responses to this demand have
been formulated: the creation of a supra-national “bankruptcy court”,
as envisaged in the SDRM proposal put forward by the IMF in 2001; and the reliance
upon national courts, specifically those in which jurisdiction the initial debt
contracts had been signed. This latter option corresponds to the contract-based
approach to sovereign defaults based on Collective Action Clauses, which was eventually
adopted in spring 2003. It is defended that outsourcing third-party mediation
makes the IMF considerably much weaker, as it remains with only two functions
and no consistent rules of interaction with its traditional partners – private
investors and the government of debtor countries. |
Abstract |
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| Sovereign Debts; Judicialisation; Multilateralism;
IMF; Conditionality |
Keywords |
| F33; F34; K33 |
JEL classification |
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