Lending to the Borrower from Hell: Debt and Default in the Age of Philip II

• 成果类型: Article
• 署名作者: Drelichman, Mauricio; Voth, Hans-Joachim
• 署名单位: ICREA; Pompeu Fabra University; University of British Columbia; Canadian Institute for Advanced Research (CIFAR); Centre de Recerca en Economia Internacional (CREI)
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/j.1468-0297.2011.02442.x
• 发表日期: 2011
• 页码: 1205-1227
• 关键词: sovereign-debt; repudiation; models; spain

摘要

What sustained borrowing without third-party enforcement in the early days of sovereign lending? Philip II of Spain accumulated towering debts while stopping all payments to his lenders four times. How could the sovereign borrow much and default often? We argue that bankers ability to cut off Philip IIs access to smoothing services was key. A form of syndicated lending created cohesion among his Genoese bankers. As a result, lending moratoria were sustained through a cheat-the-cheater mechanism. Our article thus lends empirical support to a recent literature that emphasises the role of bankers incentives for continued sovereign borrowing.