论偿债的收益

This paper studies whether a country can benefit from not defaulting on its debts during times of widespread sovereign defaults. We focus on Colombia, which is the only large Latin American country that did not default in the 1980s. Using archival research and formal econometric estimates of Colombia’s probability of default, we show that in the early 1980s, Colombia’s fundamentals were not significantly different from those of the Latin American countries that defaulted on their debts. We then document that the different choice made by Colombia was due to the authorities’ belief that maintaining a good reputation in the international capital market would have substantial payoffs. We discuss how high-level political support from the US allowed Colombia to be particularly creditor-friendly and avoid an International Monetary Fund (IMF) program. Our counterfactual analysis shows that in the short to medium run, Colombia benefited from avoiding an explicit default. We also test whether Colombia’s behavior in the 1980s led to long-lasting reputational benefits. Using an event study based on a large sudden stop, we find no evidence for such gains.