Sovereign Debt in Latin America, 1820-1913
This paper examines sovereign lending to Latin America and the Caribbean from 1820 to 1913. We examine four waves of capital flows where defaults were followed by a return to market access. In spite of extended default, countries kept promising high returns that attracted international investors again and again: financial autarky thus gave way to eras of high integration to global markets as measured by sovereign risk pricing. We discuss imperfections of the sovereign debt institutional context in the region and discuss a menu of options that some countries used to seek funds in the global financial markets after defaults. The parallel with the modern Latin American and Caribbean sovereign bond market experience is striking.
We thank the IDB for support and Leticia Arroyo Abad for excellent research assistance. All errors are ours. Alan Taylor served as a Senior Advisor at Morgan Stanley in 2010-11, and has received compensation for presenting research findings at private and public sector meetings. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.
Alan M. Taylor
Alan M. Taylor has served as an author, consultant or speaker for various policy making institutions and financial sector firms. He served as a Senior Advisor to Morgan Stanley in 2010-11.
della Paolera, Gerardo & Taylor, Alan M., 2013. "Sovereign debt in Latin America, 1820-1913," Revista de Historia EconÃ³mica / Journal of Iberian and Latin American Economic History, Cambridge University Press, vol. 31(2), pages 173-217, September. citation courtesy of