Reputation and International Cooperation: Sovereign Debt across Three Centuries

324 Pages·2007·1.36 MB·English

by  Michael Tomz

REPUTATION AND
INTERNATIONAL COOPERATION

REPUTATION AND
INTERNATIONAL COOPERATION
SOVEREIGN DEBT ACROSS
THREE CENTURIES
Michael Tomz
PRINCETON UNIVERSITY PRESS PRINCETON AND OXFORD
Copyright©2007byPrincetonUniversityPress
PublishedbyPrincetonUniversityPress,41WilliamStreet,
Princeton,NewJersey08540
IntheUnitedKingdom:PrincetonUniversityPress,3MarketPlace,
Woodstock,OxfordshireOX201SY
AllRightsReserved
LibraryofCongressCataloging-in-PublicationData
Tomz,Michael.
Reputationandinternationalcooperation:sovereigndebt
acrossthreecenturies/MichaelTomz.
p. cm.
Includesbibliographicalreferencesandindex.
ISBN-13:978-0-691-12930-3(cloth:alk.paper)
ISBN-13:978-0-691-12469-7(pbk:alk.paper)
1.Debts,External—History.2.Debtorandcreditor—History.I.Title.
HG3891.5.T662007
336.3'43509——dc22 2007005573
BritishLibraryCataloging-in-PublicationDataisavailable
ThisbookhasbeencomposedinSabon
Printedonacid-freepaper.∞
press.princeton.edu
PrintedintheUnitedStatesofAmerica
10 9 8 7 6 5 4 3 2 1
To Julie, Emily, Anna, and David

Contents
ListofTables ix
ListofFigures xi
Preface xiii
PARTONE:THEORY 1
Chapter1.
ThePuzzleofCooperationinInternationalDebt 3
Chapter2.
ATheoryofCooperationthroughReputation 14
PARTTWO:EVIDENCE 37
Chapter3.
ReputationsofNewandSeasonedBorrowers 39
Chapter4.
ReputationinExpertOpinion 70
Chapter5.
ReputationsduringGoodTimesandBad 86
Chapter6.
EnforcementbyGunboats 114
Chapter7.
EnforcementthroughTradeSanctions 158
Chapter8.
EnforcementthroughCollectiveRetaliation 196
PARTTHREE:IMPLICATIONS 221
Chapter9.
ReputationandCooperationunderAnarchy 223
Bibliography 243
Index 275

Tables
3.1 BondYieldsofSeasonedandNewBorrowers,
Amsterdam,1771 42
3.2 BondYieldsofSeasonedandNewBorrowers,
Amsterdam,1783 44
3.3 BondYieldsofSeasonedandNewBorrowers,
London,1824–25 49
3.4 BondYieldsofFourTypesofBorrowers,London,
1872 59–60
3.5 RegressionAnalysisofBondYields,London,1872 63
3.6 RegressionAnalysisofBondYieldsofSettlers,
London,1872 66
3.7 RegressionAnalysisofBondYieldsof
NewBorrowers,London,1872 67
4.1 ReferencestoReputation,MilitaryIntervention,
andTradeSanctionsinExpertTexts,1919–29 75
5.1 RelationshipbetweenCreditHistoryand
NewBorrowinginthe1920s 88
5.2 RegressionAnalysisofBondYieldsin1928 92
5.3 RelationshipbetweenCreditHistoryand
NewBorrowinginthe1930s 101
5.4 BondYieldsofCountriesThatRepaidand
Reborrowed,1931–33 103
5.5 Argentina’sDebtConversion,1934–37 107
5.6 Australia’sDebtConversion,1932–37 110
6.1 CountriesintheGunboatSample,1820–1913 120–121
6.2 MilitaryActionbyCreditorsagainstDebtors,
1820–1913 122
6.3 LogitAnalysisofMilitarizedInterstateDisputes,
1820–1913 124
6.4 MilitaryActionbyEachCreditoragainstDebtors,
1820–1913 125
6.5 AnalysisofMilitarizedInterstateDisputesThat
CoincidedwithDebtDefault,1820–1913 128–131
6.6 BritishRefusaltoApplyPressureinDiplomatic
Correspondence,1823–53 145
6.7 ForeignBondListingsinBelgium,theNetherlands,
andSwitzerland,1820–1913 149