Bankruptcy of countries

Background

The phenomenon of national bankruptcy gained global attention in the 19th century, as sovereign defaults by countries like Spain and Greece disrupted international finance. The 1980s Latin American debt crisis and the 1998 Russian default further highlighted the systemic risks posed by insolvent states. Over time, recurring episodes—such as Argentina’s 2001 crisis and the 2010s Eurozone turmoil—have deepened international understanding of the complex economic, social, and political ramifications of country-level insolvency.

Incidence

In 1998 76 states remained in default on their foreign bonds, effectively declaring their bankruptcy to the international community. On average, two new states a year have declared bankruptcy during the 1990s.