ABSTRACT Conventional wisdom claims that reputation leads sovereign states to full debt repayment. However, defaults are recurrent, some debtor countries take a lot of time to end them, and some extract costly concessions from investors. This article argues that these differences are largely explained by the political regimes in the borrowing countries. While previous research examines whether democracies make more credible commitments, we analyze how democracies affect bargaining with foreign investors after a default occurs. Democracies, with their institutional checks, electoral uncertainty, greater transparency, and public deliberation, make swift decision-making harder, create incentives to pander and posture, and give leverage to minimize the win set of viable agreements. We test our theory on a comprehensive dataset of debt restructurings with private creditors in the period 1975–2017. The event history analysis indicates that democracies experience longer restructurings and the double-hurdle regression analysis shows that democracies obtain larger creditor losses. Further, there is interesting variation among democracies and autocracies. Our findings suggest that political regimes are crucial to explaining why cooperation fails in international debt markets.

中文翻译：

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理发的时间：政治体制和主权债务重组

摘要传统观点认为，声誉会导致主权国家全额偿还债务。但是，违约是经常发生的，一些债务国花费大量时间来结束违约，一些债务国从投资者那里获得了昂贵的让步。本文认为，这些差异很大程度上是由借款国的政治制度所解释的。虽然先前的研究检查了民主国家是否做出了更可信的承诺，但我们分析了民主国家在违约发生后如何影响与外国投资者的议价。民主国家通过其制度上的检查，选举的不确定性，更大的透明度和公众的考虑，使迅速的决策变得更加困难，激励人们轻描淡写和摆姿势，并发挥杠杆作用以尽量减少可行协议的胜利。我们在1975-2017年期间与私人债权人进行的债务重组综合数据集上测试了我们的理论。事件历史分析表明，民主国家经历了更长的重组，而双关回归分析表明，民主国家获得了更大的债权人损失。此外，民主国家和专制国家之间存在有趣的差异。我们的发现表明，政治制度对于解释为什么国际债务市场合作失败的关键。