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A Discourse Theoretical Approach to Sovereign Debt Restructuring: Towards a Democratic Financial Order

Published online by Cambridge University Press:  06 March 2019

Abstract

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This Article studies the role of law for aligning democracy with a market-based financial order. Jürgen Habermas's discourse theoretical understanding of the role of law in the welfare state establishes a structure for exploring this issue. According to this approach, law needs to be enforceable, law-making and law-application need to be institutionally separated, and public law needs to be distinguishable from private law. The contemporary practice of sovereign debt restructuring reveals some empirical and normative challenges to this understanding of the law. Based on these findings, this Article proposes several conceptual and institutional improvements that might lead to a more stable relationship between democracy and financial order. In particular, we argue that sovereign debt restructuring should tap the legitimating potential of existing transnational discourses that are characterized by cross-border cleavages in public discourse.

Type
Research Article
Copyright
Copyright © 2016 by German Law Journal, Inc. 

References

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172 For a proposal as to how the design of an international financial architecture could draw on the institutional setting of the ILO, see Tsotroudi, Katerina, International Labour Standards as a Model for the Future: The Case of Financial Regulation, in Les normes internationales du travail: un patrimoine pour l'avenir. Mélanges en l'honneur de Nicolas Valticos 615 (George Politakis ed., 2014).Google Scholar

173 See other organizations, for example, Consejo Presidencial Andino, Consejo Consultivo Empresaral, and Consejo Consultivo Laboral. Google Scholar

174 In the case of MERCOSUR, workers' and employers' representatives can also vote on instruments and policies to be adopted by the organization in the area of social and labor affairs.Google Scholar

175 For the ECJ, see Jan Komárek, National Constitutional Courts in the European Constitutional Democracy, 12 Int'l J. Const. L. (2014).Google Scholar