The UNCTAD Principles on Promoting Responsible Sovereign Lending and Borrowing​, published in 2012, set out the essential responsibilities of both lenders and borrowers of sovereign debt. They identify fundamental soft law concepts or norms of international law and their applicability to realm of sovereign debt crisis prevention.
Determinants of sovereign insolvencies include systemic factors and extraordinary shocks, but are also influenced by the behavior of lenders and borrowers. Given the devastating effects of sovereign debt crisis on citizens, and the vulnerability of developing countries to default, as well as contagion effects, encouraging responsible sovereign borrowing and lending practices is a matter of international concern. Sovereign lending and borrowing conducted in a prudent and disciplined manner can promote growth and development. UNCTAD launched an initiative in 2009 to promote responsible sovereign lending and borrowing practices, culminating in the
Principles on Promoting Responsible Sovereign Lending and Borrowing
Read more on our research on Prevention and Resolution of Sovereign Debt crisis here.
