When Nations Can't Default

War reparations have been large and small, repaid and defaulted on, but the consequences have almost always been significant. Ever since Keynes made his case against German reparations in The Economic Consequences of the Peace, the effects of transfer payments have been hotly debated. When Nations Can't Default tells the history of war reparations and their consequences by combining history, political economy, and open economy macroeconomics. It visits often forgotten episodes and tells the story of how reparations were mostly repaid - and when they were not. Analysing fifteen episodes of war reparations, this book argues that reparations are unlike other sovereign debt because repayment is enforced by military and political force, making it a senior liability of the state.

'War reparations are often viewed solely through the lenses of German reparations following World War I. Simon Hinrichsen's carefully researched book shows that war reparations are not only common but that the German experience in terms of repayment is more the exception than the rule. By framing the reparations issue in the sovereign debt literature, the book offers new insights into the political and economic aspects of war reparations.' Kim Oosterlinck, Professor of Finance, Université libre de Bruxelles
'War reparations has been a topic of considerable contemporary debate given the ongoing Russia-Ukraine conflict. Yet, much of the discussion has been remarkably bereft of an understanding of how these issues were tackled in the past. This book is a wonderful treatment of the history, economics and politics of war reparations and, hopefully, will result in the contemporary debates becoming more sophisticated. I teach classes on Reparations and Sovereign Debt and this book has already, even in draft form, proved to be an invaluable resource.' Mitu Gulati, Professor of Law, University of Virginia
'In this insightful book, Hinrichsen analyses how and, more importantly, why war reparations have been paid, restructured, repudiated or simply ignored over the last two centuries. War reparations are unlike all other types of sovereign debt. If wars of aggression were exclusively a feature of earlier centuries, Simon Hinrichsen's book would be a fascinating study of how the monetary reparations payable to the victors in those conflicts were eventually handled. But as Russia's invasion of Ukraine in 2022 demonstrates, unprovoked aggression is not confined to earlier centuries and the international community may soon need to grapple, yet again, with the issue of war reparations.' Lee C. Buchheit, University of Edinburgh

Simon Hinrichsen runs investments in emerging market sovereign bonds for a pension fund and has published in journals on history and economics. He is an External Associate Professor at the University of Copenhagen where he teaches a course on sovereign debt. He has advised governments and was previously a Visiting Fellow at the London School of Economics.

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