Ius Cogens, Transitional Justice and Other Trends of the Debate on Odious Debts: A Response to the World Bank Discussion Paper on Odious Debts

By: ,

In recent times, the issue of odious debts has received a lot of political and academic attention, particularly in the context of Iraq and the unilateral decision of the Norwegian government to cancel certain debts of developing countries because of Norwegian co-responsibility. In 2008, the World Bank published a discussion paper on odious debts that examines the legal standing of the doctrine of odious debts in international law and the recent trend to expand the traditional concept to wider scenarios, presenting improved lending practices as an alternative to classifying certain debts as odious and allowing their repudiation. This article offers a critique of the main findings of the discussion paper. It argues that the authors were too quick in dismissing the ius cogens approach to odious debts; that legal approaches to odious debts need to be understood in the context of transitional justice; and that the odious debt doctrine and debt restructurings are not mutually exclusive, but should rather be seen as complementary, given that an assessment of the odiousness of debts has an important place in the context of restructurings and sovereign insolvency.