Odious debt in the 21st century

The "Paris IAS Ideas" online talk series features short and stimulating presentations from fellows of the Paris Institute for Advanced Study, marking the beginning of 1-month writing residencies.

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Presentation

A growing number of countries are crumbling under record levels of debt, jeopardizing their development prospects and the fight against global warming. As debts are legal contracts, states are bound by the principle of pacta sunt servanda ("agreements must be respected"). An exception to the rule of repayment is "odious debt". This legal concept generally refers to a nation's debts contracted against the interests of its population. Over the last century, this notion has been invoked to justify the cancellation of debts in contexts of state succession (e.g. Algeria 1962), after the fall of a despotic regime (e.g. Iraq 2003) or in times of war (e.g. Ukraine 2023). But it has yet to be applied outside these specific contexts. The scope and application of odious debt has attracted considerable interest and debate in academic and civil society circles in recent years, with some calling for a broader and more flexible approach. This residency will provide an overview of the benefits that a revised concept of odious debt could bring to states and, more generally, to the stability of the international financial order.