Embedded Contracts and a Continuum of Sovereign Debt

6 Accounting, Economics, and Law 263-272 (2016)What is the relationship of a government to its population as itpertains to sovereign debt? And how does this fit into the larger web of relationshipsand obligations that make up the international financial arena? Thesequestions are incredibly difficult to think through – beyond the capacity of oneauthor alone. I am therefore grateful to have the company of Yuri Biondi, BarryHerman, Tomoko Ishikawa, and Kunibert Raffer in beginning to consider them.In addressing their thoughtful and thought-provoking comments, I see thisresponse less as an opportunity to answer every potential challenge or differentialemphasis. Indeed, the comments by and large extend the analysis of thebook in incredibly insightful ways. Instead, I take this brief essay as a chance toidentify several themes uniting the responses, and to highlight how thesethemes raise additional questions for the sovereign debt regime going forward.In particular, the comments suggest the ways in which the issues and actionsassociated with questions of sovereign legitimacy in the debt market exist not asdichotomies but rather on a continuum. I fully agree with this implicit characterization,and contend that – given that this is the case – challenging themarket narrative that supports the repayment of odious debt should help toundermine resistance to reforming the regime for restructuring sovereign debtmore generally. In addition, the comments emphasize how sovereign debt canbe thought of as embedded in two types of social contract, both of which shouldshape how we think of appropriate policy responses to the challenges of thecontemporary moment.