Any attempt to alter the status quo of sovereign debt relations must begin with a full understanding of it and the mechanisms that sustain it. The concept of odious debt essentially challenges the present international doctrine of state succession, which requires for the continuity of rights and obligations, including the obligation to assume debts, when there is a change in government. Before addressing the purported exception of odious debt, it is necessary to analyze the incentives that drive debtors to pay back their debts upon succession.
KeywordsState Succession Credit Market External Debt Sovereign Debt Reputation Model
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