Essays on war reparations and sovereign debt: two hundred years of war debts and default, from the Napoleonic Wars to Iraq

Hinrichsen, Simon (2021) Essays on war reparations and sovereign debt: two hundred years of war debts and default, from the Napoleonic Wars to Iraq. PhD thesis, London School of Economics and Political Science.

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Abstract

Wars are expensive. For more than 200 years, victors have imposed reparations and indemnities on defeated nations to help pay the bill. Reparations have been large and small, repaid and cancelled, but the consequences have almost always been significant. Reparations constitute vast flows of money, affecting all aspects of the political economy, yet are poorly understood. After German interwar reparations were blamed for the subsequent economic collapse and default in the 1930s, large-scale reparations fell out of political favour. But they did not go away. World War II peace settlements included sizable transfers, and Iraq continues to pay reparations from the Gulf War. This thesis is a historiography of these reparations. It visits often forgotten episodes and tells the story of how reparations were mostly repaid - and when they were not. My thesis consists of three main parts. The first paper focuses on the terms of trade and the economic effects from the Napoleonic Wars reparations. In a small open economy model, I show that the French terms of trade improved, and the gains were close to the size of the reparation. The second paper examines how reparations are enforced, using sovereign debt analysis. The paper explains why Germany defaulted on its sovereign debt, while everyone else repaid their sovereign debt raised to pay reparations. It shows how enforcement of debt contracts is key to understand the political economy of paying reparations-related debts. The third paper writes the debt history of Iraq from 1979. It documents how, in less than 25 years, Iraq went from being a net creditor to the most indebted nation in the world. The full story of how Iraq restructured its debt burden, yet still repaid reparations, is told for the first time.

Item Type:	Thesis (PhD)
Additional Information:	© 2021 Simon Hinrichsen
Library of Congress subject classification:	D History General and Old World > D History (General) > D204 Modern History H Social Sciences > HC Economic History and Conditions U Military Science > U Military Science (General)
Sets:	Departments > Economic History
Supervisor:	Ritschl, Albrecht and Postel-Vinay, Natacha
URI:	http://etheses.lse.ac.uk/id/eprint/4354

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