The Effects of Foreign Asset Expropriation on Debt Restructuring

• In Event: Poster Session: International Political Economy 1 & Migration and Citizenship
  In Poster Session: Poster Session: International Political Economy 1

Abstract

Since the 1970s, the determinants of debt restructuring has garnered scholarly attention. Borrower countries seek debt restructures, as it allows them to avoid severe and long-term economic declines and higher interest rates tied to debt default. At much the same time, foreign asset expropriation has drawn interest, as developing countries have increasingly nationalized foreign assets to serve economic and political goals. However, no research that we are aware of has considered the effects of foreign asset expropriation on the likelihood for debt restructuring. The fact that debt issues involve private or public creditors’ decision making raises the possibility that the politics of expropriation may impact debt restructuring. Using panel data for 87 developing countries from 1970 to 2019, we explore the relationship between foreign asset expropriation and debt restructuring.

Author

• Hoon Lee, Texas Tech University