Sovereign Financing and International Law: The UNCTAD Principles on Responsible Sovereign Lending and Borrowing

Abstract

1. As an independent project that stems from the conference on ‘Responsible Sovereign Financing: The Search for Common Principles’ organized by the University Autónoma of Madrid and United Nations Conference on Trade and Development (UNCTAD) in Madrid on 2 March 2012, this book critically assesses the global background, legal implications, economic rationale, regional practices relating to, as well as the future implementation of, the Principles on Responsible Sovereign Lending and Borrowing (“the Principles”), a recently proposed initiative on promoting responsible sovereign lending and borrowing in the light of the global financial crisis of 2007–2008. This project gathered wisdom from world-renowned experts. 2. Apart from the Introduction and Conclusion, the book contains five parts, with 17 chapters in total. The Introductory part, consisting of Chapter 1, is an overview on why the book was written and its objectives and contents. 3. Part I (Chapters 2 and 3) sets the global scene of the book with a discussion of the economic rationale of the Principles and an analysis of the exercises of international public authority involved in sovereign debt restructurings. Chapter 2 assesses the importance and the magnitude of sovereign financing, the origins of debt crises and the need for a set of principles addressing the problem of excessive debt. Chapter 3 focuses on the justification of international public authority's applying to existing arrangements for sovereign debt restructurings, the methodology for constructing a legal framework for international public authority and some elaborative proposals to increase this framework's legitimacy (pp. 55–69); it concludes by providing the advantages and limitations of this approach.