The first half of this Essay surveys recent efforts to protect governments from private creditor lawsuits in national courts. The general shield already in place-a bundle of sovereign immunities that have inspired a rich literature-has looked increasingly fragile in the wake of emerging sovereign bond crises, an impression reinforced by hundreds of lawsuits against Argentina. But the project of bolstering these protections, which culminated in the IMF's statutory sovereign bankruptcy proposal, kept running into political and technical constraints that looked insurmountable. In the case of Iraq, the United Nations dispensed with these constraints and granted broad new immunities for Iraqi assets, all but destroying the prospect of near-term recovery from litigation. In the second half, I look at the Odious Debt Doctrine, which is experiencing a revival after regime change in Iraq. The doctrine is often cited for the proposition that the countries emerging from nasty dictatorships can repudiate their debts, because those debts came about without the consent of or benefit for their people. But since its invention and throughout the past century-rife with oppressive regimes, revolutions, reckless borrowings, and debt defaults-the doctrine has languished in near complete disuse save for an occasional NGO campaign or bout of parliamentary rhetoric. Just as Iraq is an unlikely source of lessons for sovereign bankruptcy in the age of financial globalization, Argentina's experience since 2001 helps explain why governments do not use the Odious Debt Doctrine to disavow the obligations of their predecessors.
"What Iraq and Argentina Might Learn from Each Other,"
Chicago Journal of International Law:
1, Article 23.
Available at: https://chicagounbound.uchicago.edu/cjil/vol6/iss1/23