Economics
The Political Economy of Sovereign Debt Defaults
Quick fact
In 2015, Greece’s government faced a choice between default and continued austerity—and ended up defaulting while the prime minister negotiated a new bailout, showing that domestic politics often drive default decisions.
Why this is interesting
When a country stops paying its debts, it isn’t just about money—it’s a political earthquake that can topple governments. Why do some leaders default while others endure austerity?