Title

Agency By Analogy: A Comment on Odious Debt

Document Type

Article

Comments

The most up-to-date version of this piece can be found in the Duke Law Scholarship

Abstract

This paper explores the application of doctrines drawn from common-law agency to the phenomenon of odious debt and the circumstances under which debt incurred by a regime should not bind a sovereign borrower following a change in regime. The paper demonstrates that, although aspects of agency doctrine appear to hold promise as solutions for odious debt incurred by a sovereign borrower, this promise is offset by other agency doctrines. Most generally, the central point of common-law agency doctrine is to specify the circumstances under which the legal consequences of a representatives’s actions should be attributed to the representative’s principal. This body of doctrine is deeply incompatible with concepts of proportional or partial responsibility which seem often to describe circumstances in which some constituents of an earlier regime approved or benefitted from the proceeds of debt incurred by the regime.

To make these points concretely, the paper develops an extended series of comparisons between the consequences of borrowing by a sovereign and by a private corporation afflicted with inept or corrupt management. As the paper demonstrates, the concepts developed within common-law agency apply only indirectly or by analogy.

Date of Authorship for this Version

April 2007