States have traditionally offered support to their fiscally distressed municipalities. When less intrusive forms of assistance fail to bring stability, some states employ supervisory institutions that exercise approval authority over local budgets or, more intrusively, that displace locally...

This essay draws on historical and current examples to examine the extent to which public creditors can enhance democracy by monitoring public officials in a manner that compansates for the failures of the government-debtor's constituents to monitor public officials. Creditors and constituents...