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This article argues that the doctrine of Odious Debt, which has enjoyed a revival since the U.S. invasion of Iraq in 2003, frames the problem of odious debt in a way that excludes most of the problematic obligations incurred by twentieth-century despots. Advocacy and academic literature traditionally describe the odious debt problem as one of government contracts with private creditors. Most theories of sovereign debt key off the same relationship. But in the latest crop of cases, including Iraq, Liberia, and Nigeria, private creditors represent a small fraction of the old regime's debts. Most of the creditors are other governments and public institutions. Private and official sovereign debt share formal similarities (such as the promise to repay), but are far apart in substance. Unlike private debt, official debt is never extended at arm's length or for direct economic gain; the usual goal is policy influence over the borrower. Governments often lend in dire economic circumstances where no arm's length money is available and repayment prospects are dim. The article suggests that these transfers are not really debt, but rejects the popular view that they are disguised grants. It uses the case of official debt as a starting point to explore the significance of debt form in sovereign finance. It focuses on the apparent disconnect between the form of official transfers and the substance of the economic and political relationship it represents to draw out implications for debates about odious debt and beyond.

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70 Law & Contemp. Probs. 81 (2007)