William & Mary Law Review


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 compensates for the failures of the government debtor's constituents to monitor public officials. Creditors and constituents may share significant interests, depending on the structure of security arrangements for public debt and the identity of the debtors. Where interests overlap, the capacity of creditors to overcome collective action problems suffered by constituents may transform creditors into surrogates for constituents. Whether creditors are willing to play this role, however, may depend on the existence of alternatives to creditor monitoring, such as diversification and market constraints on default. The Essay concludes with an examination of the plausible scope of creditor monitoring in contemporary settings of sovereign and state and local debt.


An earlier version of this Essay was presented as the annual George Wythe Lecture at the College of William & Mary Marshall-Wythe School of Law on April 3, 2008.

Publication Information

50 William and Mary Law Review 937-988 (2008)