Fixing the collective action problem in sovereign debt restructuring: significance of Global South solidarity

This paper attempts to analyse the limitations of contractual mechanisms of resolving collective action disputes against sovereign debtors. The Global South has been at the receiving end of the sovereign debt obligations and collective action clauses (CACs) agenda. The lack of control over the domes...

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Bibliographic Details
Published in:Third world quarterly 2022-05, Vol.43 (5), p.1074-1092
Main Authors: Ansari, Salamah, M., Deva Prasad, Babu, R. Rajesh
Format: Article
Language:English
Subjects:
Collective action
collective action clauses
Debt restructuring
Developing countries
Disputes
Global South solidarity
Human rights
International law
LDCs
National debt
Sovereign debt
TWAIL
Citations: Items that this one cites
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Summary:This paper attempts to analyse the limitations of contractual mechanisms of resolving collective action disputes against sovereign debtors. The Global South has been at the receiving end of the sovereign debt obligations and collective action clauses (CACs) agenda. The lack of control over the domestic economy and the human rights impacts of mounting sovereign debt brings to the fore the absolute lack of fairness and equity in the CAC-based framework for restructuring sovereign debt. The contemporary international order does not address the non-economic concerns of an indebted state. The unfair treatment meted out to the Global South opens the need for Third World approaches to international law (TWAIL) voices against sovereign debt. The current discourse and literature on CAC have remained mainly aloof to the contributions and importance of TWAIL in the context of CACs. Sovereign debt and the use of CACs need a fresh outlook based on the development of international human rights law. Alternative movements based on Global South solidarity against the present structural and systemic problems of sovereign debt and CACs need to be explored.
ISSN:0143-6597
1360-2241
DOI:10.1080/01436597.2022.2050459