Book Project
My book manuscript, Domesticating the International: The Uneven Enforcement of Investors’ Preferences and Its Unintended Consequences, asks how a domestic US court came to constrain the economic policy of foreign sovereign states.
For much of US history, the doctrine of absolute sovereign immunity insulated foreign governments from suit in American courts. A sovereign could not be brought before a foreign judge without its consent, leaving creditors with little legal recourse when governments defaulted. The 1952 Tate Letter began to dismantle this arrangement by announcing that the United States would instead follow the restrictive theory of sovereign immunity: governmental acts would remain protected, but commercial conduct could be adjudicated. The 1976 Foreign Sovereign Immunities Act (FSIA) later codified that distinction and transferred responsibility for applying it from the State Department to federal courts.
This shift transformed more than legal procedure. It made the boundary between sovereign authority and commercial activity a question for American judges. When Argentina defaulted, it was therefore a federal judge in lower Manhattan—not the IMF or an international tribunal—who blocked the country from servicing its restructured debt. The book’s central argument is that US federal courts, and the Southern District of New York (SDNY) above all, became the de facto regulators of international sovereign debt markets—an outcome no one designed. A State Department policy memorandum, the FSIA, boilerplate contractual language, and the ordinary machinery of private litigation combined to create an enforcement regime with global reach. Because emerging-market sovereign bonds are overwhelmingly issued under New York law and rely on New York-linked financial infrastructure, the decisions of a domestic federal court acquired consequences far beyond the United States.
I trace this regime across three movements—origins, operation, and aftermath—drawing on three original datasets I collected (see the Data page): all sovereign immunity requests submitted to the State Department during the Tate Letter regime from 1952 to 1977, all sovereign litigation in US courts from 1811 to 1976, and all sovereign debt cases brought to the SDNY from 1976 to 2022.
Origins
1. Sovereignty over Commerce: The Tate Letter and the Unwritten Bond Exemption, 1952–1976. This chapter traces the United States’ transition from absolute to restrictive sovereign immunity. The Tate Letter announced that foreign states would no longer receive immunity for their commercial conduct, but it offered no clear criteria for distinguishing governmental from commercial acts. The State Department and the courts consequently applied the new policy inconsistently, navigating between restrictive immunity and continued judicial restraint toward foreign sovereign authority. Most importantly, sovereign borrowing and default remained largely protected: courts treated decisions over public debt as internal acts of fiscal governance rather than commercial failures subject to judicial remedy, creating an unwritten bond exemption that persisted until the FSIA.
2. From Default to Litigation: The Legal Architecture of Exposure. This chapter asks how a sovereign default becomes subject to domestic judicial authority. Matching SDNY litigation to the broader universe of default and restructuring episodes since the FSIA, I show that court involvement is structured by a specific legal architecture: New York-law obligations, restructurings that preserve creditor claims, and access to US forums transform some defaults—but not others—into disputes that domestic courts can adjudicate.
Operation
3. Democracy, Debt, and the Bench: Political Ideology in Sovereign Immunity Cases. (Forthcoming, International Organization.) Although the FSIA established a framework favorable to contract enforcement, judicial outcomes remain variable. Republican-nominated judges apply the statute’s pro-creditor framework consistently across defendant types. Democratic-nominated judges exhibit conditional deference: they are more willing to defer to a defaulting democracy that demonstrated fiscal restraint beforehand, but enforce more strictly when high government consumption suggests that default reflected strategic choice rather than necessity. For autocratic defendants, whose fiscal behavior provides a less credible signal of genuine distress, judges nominated by both parties converge on pro-creditor rulings. The analysis draws on an original dataset of SDNY sovereign debt litigation from 1977 to 2022.
4. Information Clearinghouse: Market Implications of US Judicial Decisions. US courts shape international financial markets not by compelling sovereign repayment directly, but by producing authoritative legal information about what private creditors can credibly attempt. Markets reprice sovereign debt when a ruling changes the availability of asset discovery, attachment, or payment-disruption strategies. The direction of that response follows the enforcement channel the ruling opens—not simply which party formally prevailed—while rulings that leave the enforcement environment unchanged produce little market response.
5. Courts, Contracts, and Supply Chains: Judicial Signals and the Trade Consequences of Sovereign Default. This chapter extends the informational argument beyond financial markets. Using a country-year panel of defaulting states with country and year fixed effects, I show that creditor-favorable rulings are followed by a recovery in intermediate-goods imports, particularly following more severe defaults and among capital goods whose production depends heavily on stable contractual relationships. Defendant-favorable rulings produce no comparable response, indicating that firms respond to the legal validation of creditor claims rather than to judicial resolution alone.
Aftermath
6. After the Gavel: The Fading of the Holdout Era. Within four years of its greatest triumph, the enforcement regime nearly stopped operating as it had before. New sovereign debt suits in the SDNY fell by an order of magnitude after 2016—even as the stock of defaulted sovereign debt rose—because the market rewrote the contractual provisions that had made the holdout strategy so powerful. The same decentralized process that created the court-centered regime therefore also curtailed it, revealing creditor power to be institutionally constructed rather than fixed.
The manuscript is nearly complete.