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A network model of creditor coordination

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  • Paasha Mahdavi
  • Christina J. Schneider
  • Jennifer L. Tobin

Abstract

This paper presents a network model of creditor coordination. We argue that creditors are embedded in informal networks that shape their willingness to provide loans or restructure debt. Rather than acting in isolation, creditors observe each other’s actions, update expectations about collective outcomes, and adjust their strategies accordingly. Using a stochastic actor-oriented network model, we analyze how the rescue strategies of four major creditor groups – the IMF, official bilateral creditors, the Paris Club, and private creditors – co-evolved across more than 100 debtor countries between 1992 and 2013. Our findings show that creditor decisions are shaped by evolving network dynamics: When some creditors provide support, it alters the structure of the network, reducing perceived risks and reinforcing additional creditor participation. These results highlight the critical role of informal, mutually reinforcing coordination in facilitating sovereign debt rescues and offer new insights into the strategic underpinnings of international financial cooperation.

Suggested Citation

  • Paasha Mahdavi & Christina J. Schneider & Jennifer L. Tobin, 2026. "A network model of creditor coordination," Review of International Political Economy, Taylor & Francis Journals, vol. 33(2), pages 666-695, March.
    • Handle: RePEc:taf:rripxx:v:33:y:2026:i:2:p:666-695
    DOI: 10.1080/09692290.2025.2573048
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