Where Did All the Secured Loans Go?

Once upon a time, many governments could borrow in foreign markets only if they pledged assets to back the loan. Today, sovereigns almost never do this, although it happens in other debt markets. In Episode Four, we talk with Noel Maurer (George Washington University) about property rights and revenue pledges. Sovereigns used to promise creditors priority to customs duties, specific taxes, etc. Creditors (or their home governments) even appointed agents to manage the borrower’s revenue institutions. For the most part, these pledges have disappeared from modern sovereign lending—a transition documented in Noel’s terrific book, The Empire Trap. We talk with Noel about why this might be. Also, Donald Trump’s willingness to buy and sell sovereign territory. (Remember the Greenland drama?) We ask whether Donald Trump would pledge parts of the U.S. if he thought it would lower borrowing costs.

Producer: Leanna Doty