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Bonds and Brands: Foundations of Sovereign Debt Markets, 1820-1830

Flandreau, Marc ; Flores, Juan H.

In: The Journal of Economic History, 2009, vol. 69, no. 3, p. 646-684

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    Titre
    • Bonds and Brands: Foundations of Sovereign Debt Markets, 1820-1830
    Auteur
    • Flandreau, Marc. Professor, The Graduate Institute, Geneva, P.O. Box 136, 1211 Geneva 21, Switzerland; and Research Fellow, Centre of Economic and Policy Research, London. E-mail: marc.flandreau@graduateinstitute.ch.
    • Flores, Juan H.. Assistant Professor, Department of Economic History, University of Geneva, 40, bd du Pont-d'Arve, CH-1211 Geneva 4, Switzerland. E-mail: juan.flores@unige.ch.
    Type de document
    • Postprint
    Langue
    • Anglais
    Publié dans
    • The Journal of Economic History, 2009, vol. 69, no. 3, p. 646-684. Cambridge University Press
    Autre version électronique
    Classification
    • Histoire
    Identifiant OAI-PMH
    • oai:doc.rero.ch:303954
    Summary
    How does sovereign debt emerge? In the early nineteenth century, intermediaries' market power and prestige served to overcome information asymmetries. Relying on insights from finance theory, we argue that capitalists turned to intermediaries' reputations to guide their investment strategies. Intermediaries could in turn commit or else they would lose market share. This sustained the development of sovereign debt. This new perspective is backed by archival evidence and empirical data, and it suggests why strong but undemocratic states could borrow. "A good name is worth more than a gem.” Yiddish proverb