Puerto Rico, as a quasi-sovereign U.S. territory, is confronting a debt crisis of unparalleled legal complexity. This article analyzes the collective action problems in sovereign debt finance in the context of Puerto Rico’s quasi-sovereign debt dilemma. We examine how sovereign debtors engage with their private creditors in the absence of a formal bankruptcy regime and show how various legal incentives, imperatives, and constraints shape the degree and form of creditor engagement. Drawing on this conceptual framework, this article analyzes the role of these factors in the market-based debt restructuring by the Puerto Rico Electric Power Authority (PREPA) and hypothesizes how these factors may influence the statutory restructuring process underway under the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA). Despite the idiosyncratic aspects of Puerto Rico’s debt crisis, the potential pathways for debtor-creditor cooperation in Puerto Rico provide valuable insights on the various ways that law influences debtor-creditor cooperation in sovereign debt finance beyond the enforcement of state-based public regulation and contract-based private legal commitments. Full article.

When we think about the legal drivers of globalization, why does the free movement of people lag so far behind the free movement of goods and services? While agreements to lower barriers to cross-border trade are enforced by global legal rules and institutions, national governments indisputably control and limit cross-border labor migration. However, the relationship between trade and labor migration in international law is anything but clear-cut and simple. Rather, as this Article shows, it is ad hoc, decentralized, and pluralistic. This Article focuses on the use of Special Economic Zones (SEZs) as an illuminating example. SEZs enable countries to selectively open borders to higher-skilled foreign workers while maximizing economic returns and minimizing socio-political costs. While advantageous to individual countries, this Article argues that the pluralistic status quo hinders comprehensive initiatives to harmonize the liberalization of trade and labor and promote freedom of movement in international labor markets. Full article.

Sovereigns are unique market participants in the global financial system, and sovereign debt markets largely operate in a legal and regulatory void. This Article adds an important and timely perspective by examining the concept of equity in sovereign debt finance. Governments, unlike corporations, rely almost exclusively on debt to externally finance their investments and operations. GDP-linked securities, which provide interest payments indexed to the sovereign issuer’s rate of growth, are sovereign debt instruments with certain equity-like characteristics. This Article considers whether innovation towards sovereign equity can help mitigate problems associated with sovereign debt crises. To address this question, we analyze the use of GDP-linked securities in recent sovereign debt restructurings by Argentina, Greece, and Ukraine. Drawing on this analysis, we explore more broadly the legal implications of sovereign equity, and conclude that these applications offer opportunities to help manage sovereign finance in the absence of readily enforceable international financial regulation. Full article.