We develop a dynamic recursive model where political and economic decisions interact, to study how excessive debt … cooperate (or not) - on the allocation of fiscal budgets (including rents) and issuance of sovereign debt. A classic commons … problem triggers collective fiscal impatience and excessive debt issuing, leading to a vicious circle of high borrowing costs …

The long history of sovereign debt and the associated enforcement problem have attracted researchers in many fields. In … literature, we emphasize parallel developments in the theory of sovereign debt. One major theme emerges. Although recent research … has sought to balance theoretical and empirical considerations, there remains a gap between theories of sovereign debt and …