From Sovereign Debt to Corporate Debt: Global Debt Governance in International Economic Law

Abstract

This article advances an integrated theory of global debt governance that brings together sovereign debt, corporate debt and household debt within a single analytical framework. Building on the critique of the Smithian narrative about the spontaneous emergence of markets, it argues that debt is a political-legal institution constructed through a stratified architecture of contractual norms, soft law instruments, financial conditionality, case law and transnational professional networks. The paper shows how this architecture constitutes a form of “governance without government” that relocates key distributive decisions to technical and private fora, thereby generating structural deficits of democratic legitimacy, equity and transparency. Sovereign debt is examined as a laboratory of contractualisation whose logic is gradually extended to corporate debt and, ultimately, to households, contributing to the production of the homo debitor as the central subject of the contemporary financial order. Based on this integrated reading, the article highlights the limits of incremental, contract-based reforms and explores the need for transnational quasi-insolvency frameworks and responsible lending and borrowing principles capable of rebalancing the global debt regime in terms of sustainability, distributive justice and democratic control.