IDEAS home Printed from
   My bibliography  Save this paper

Legitimacy in global governance of sovereign default: The role of international investment agreements


  • Brahms, Lisa


This paper analyzes the legitimacy of investor-state arbitration under international investment agreements in sovereign debt restructuring. The paper presents mechanisms governing sovereign default generally, namely collective action clauses and informal negotiation in the London and Paris clubs and then discusses how sovereign debt restructuring is governed by IIAs, looking at how the clauses affect restructuring. Taking the conception of legitimacy in global governance by Buchanan and Keohane as a theoretical framework, the legitimacy of IIAs as a mechanism of governing sovereign debt disputes is questioned, looking at the aspects transparency, accountability, minimal moral acceptability, institutional integrity and comparative benefit. It is concluded that investor-state dispute settlement on the basis of IIAs lacks legitimacy to decide on sovereign debt restructuring.

Suggested Citation

  • Brahms, Lisa, 2013. "Legitimacy in global governance of sovereign default: The role of international investment agreements," PIPE - Papers on International Political Economy 16/2013, Free University Berlin, Center for International Political Economy.
  • Handle: RePEc:zbw:fubipe:162013

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Raffer, Kunibert, 1990. "Applying chapter 9 insolvency to international debts: An economically efficient solution with a human face," World Development, Elsevier, vol. 18(2), pages 301-311, February.
    2. Freytag, Andreas & Pehnelt, Gernot, 2009. "Debt Relief and Governance Quality in Developing Countries," World Development, Elsevier, vol. 37(1), pages 62-80, January.
    3. van Harten, Gus, 2007. "Investment Treaty Arbitration and Public Law," OUP Catalogue, Oxford University Press, number 9780199217892.
    4. repec:cup:apsrev:v:99:y:2005:i:01:p:29-43_05 is not listed on IDEAS
    5. Eric Helleiner, 2008. "The Mystery of the Missing Sovereign Debt Restructuring Mechanism," Contributions to Political Economy, Oxford University Press, vol. 27(1), pages 91-113.
    Full references (including those not matched with items on IDEAS)

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:fubipe:162013. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.