Preventing Odious Obligations: A New Tool for Protecting Citizens from Illegitimate Regimes

This report sets out a way to prevent an all-too-common form of theft from some of the world’s poorest people. An illegitimate, unelected regime signs a contract with a foreign agent, handing over part of the national patrimony in exchange for a short-run payment, which the regime appropriates or uses in part to finance repression. Legitimate successor regimes often need to levy taxes to fulfill debt contracts incurred in this manner for fear of legal retribution and loss of reputation with investors if they fail to repay. And in the case of natural resource contracts, citizens continue to suffer from the sweetheart contracts that deprive the government of deserved revenues.