Denouncing Odious Debts

  • Stephanie Collet
  • Kim Oosterlinck
Original Paper


Economists have suggested it was optimal to signal the odious character of bonds when they were issued. However, since the odious debt doctrine has not been recognized by any court, one could argue that denouncing odious debts is useless. Exploiting a unique historical episode, this paper quantifies the impact of protests on odious debts. In 1906, the Russian government floated a bond in Paris to cover the costs of its war against Japan but also to raise money to crush the political movements wishing to reform Russia’s political system. Issued without parliamentary consent, this loan met with fierce opposition. Press campaigns in Great Britain, France and Germany denounced its odious character. If failure or success is determined solely by the ability to prevent a loan from being issued, then the campaign failed. We argue, however, that failure or success should be determined in light of the financial costs imposed on the issuer for future loans and even the ability to force a postponement of these loans. We show that these campaigns increased the yields of all Russian bonds traded in Paris, and thus Russia’s future borrowing cost. Yields on the 1906 loan, which was specially targeted by the campaigns, rose even more. However, once the press campaigns stopped, yields experienced a declining trend, highlighting the important role the press may have on odious debts.


Ethics Odious debt Repudiation Financial history Sovereign debt Russia 

JEL Classification

F34 G12 G15 N23 


Compliance with Ethical Standards

Conflict of interest

The authors declare that they have no conflicts of interest.

Human and Animals Rights

This article does not contain any studies with human participants or animals performed by any of the authors

Supplementary material

10551_2018_3865_MOESM1_ESM.docx (66 kb)
Supplementary material 1 (DOCX 66 kb)


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  1. Crédit Lyonnais archives, Paris, France: ACL DAF 162, ACL DAF 163, ACL DAF 164/1, ACL DAF 164/2, ACL DAF 00104/1, ACL 21 AH 57, ACL 98 AH 86.Google Scholar

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© Springer Science+Business Media B.V., part of Springer Nature 2018

Authors and Affiliations

  1. 1.Research Center SAFEGoethe UniversityFrankfurtGermany
  2. 2.Université Libre de BruxellesBrusselsBelgium

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