The Research Project


The project investigates the politics of the negotiations on international debts and assets that took place in the 1980s. Following the notable rise in international official and private loans to sovereign borrowers during the 1970s, and the increase in interest rates after 1979, the 1980s were marked by a long series of defaults, moratoria on repayment, renegotiations of existing loans and negotiations on new loans. These involved states, banks and international institutions alike, in an often changing picture of cooperation and confrontation between and among creditors and debtors. While in many ways financial turbulence remained the rule also in the following years, the beginning of the 1990s can be said to mark a periodizing junction: on the one hand, the "Brady Plan" reduced the sistemic risks of the debt/asset morass; on the other, the so-called "Washington consensus", largely encapsulating the original creditors' view, clearly emerged as the hegemonic doctrine on debt/asset issues. Since the second half of the 1980s, such complex phenomenon has passed down onto history under the label of the "international debt crisis" (sometimes also as "the Latin American debt crisis", given the high incidence of Latin American countries among debtors). A wide literature has dealt with the subject, with renewed interest since the beginning of the "great recession" in 2008. Most of such literature, however, suffers from two main (interrelated) flaws: on the one hand, there are only a few case studies based on archival research; on the other, there appears to be a perspective bias, for which it is often assumed that creditor/debtor negotiations necessarily had to end with the creditors' upper hand. The project begins from the simple observation that history is rich with cases that prove that debtors can either have it their way, or force creditors to compromise (from the king of England who ruined the Florentine bankers in the 14th century, to the same Latin American governments who often left many private bondholders with worthless papers in the 1930s). It appears necessary, thus, to investigate the negotiations empirically in order to observe the playing out of the respective strengths and weaknesses of creditors and debtors in the specific conditions of the 1980s. In order to do this, the project will search numerous archives from creditors, debtors and international organizations, with a broad approach that keeps account of the interactions of various factors in determining the final outcome of the negotiations (negotiating assets and liabilities, negotiating skills, existence or lack of alternatives, and the role of language and the public opinion). Through a reasoned selection of case studies, at the end of the three years the project will have allowed a thorough reconstruction of a crucial process of the international relations of the recent past, with possible useful policy-relevant indications for our time.