IPD AI Insights

The Practice of Sovereign Debt Sustainability Analysis

08/16/2024
Policy Brief
Jubilee USA Network, Friedrich Ebert Stiftung
Debt and Global Finance

Debt Sustainability Analyses (DSAs) have major implications for debt negotiations. The outcomes of these negotiations have distributional consequences between the debtor and its creditors on the one hand, and amongst creditors on the other hand.

DSAs are not only technical analyses – they are based also on assumptions that are essentially political – but may also affect the outcomes of debt negotiations. The study of the institutional and political frameworks under which DSAs are performed has been largely overlooked by the literature. This paper analyses the practice of DSAs, with a focus on the frameworks in which it occurs, the implications of the choices of assumptions, and the consequences for debt negotiations.