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

German Law Journal, Vol. 17, No. 5, pp. 709-746, 2016

38 Pages Posted: 29 Oct 2015 Last revised: 19 Oct 2016

See all articles by Matthias Goldmann

Matthias Goldmann

Max Planck Institute for Comparative Public Law and International Law; Goethe University Frankfurt; EBS Universität für Wirtschaft und Recht; Leibniz Institute for Financial Research SAFE

Silvia Steininger

Max Planck Institute for Comparative Public Law and International Law

Date Written: October 4, 2016

Abstract

In this paper, we study the role of law for squaring democracy with a market-based financial order. We approach this issue on the basis of Jürgen Habermas’ discourse theoretical understanding of the role of law in the welfare state. Accordingly, 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. These findings inform our proposals for conceptual and institutional improvements that might lead to a more harmonious relation between democracy and financial order. In particular, we argue that a discourse theoretical understanding should tap on the legitimating potential of existing transnational discourses that are characterized by cross-border cleavages in public discourse.

Keywords: democracy, finance, role of law, discourse theory, Habermas, sovereign debt, cleavages

Suggested Citation

Goldmann, Matthias and Steininger, Silvia, A Discourse Theoretical Approach to Sovereign Debt Restructuring: Towards a Democratic Financial Order (October 4, 2016). German Law Journal, Vol. 17, No. 5, pp. 709-746, 2016 , Available at SSRN: https://ssrn.com/abstract=2683283 or http://dx.doi.org/10.2139/ssrn.2683283

Matthias Goldmann (Contact Author)

Max Planck Institute for Comparative Public Law and International Law ( email )

Im Neuenheimer Feld 535
69120 Heidelberg, 69120
Germany

HOME PAGE: http://www.mpil.de/ww/en/pub/organization/scientific_staff/mgoldman.cfm

Goethe University Frankfurt ( email )

Theodor-W.-Adorno-Platz 3
HoF H4
Frankfurt, 60629
Germany

HOME PAGE: http://https://www.jura.uni-frankfurt.de/62222403/Goldmann

EBS Universität für Wirtschaft und Recht ( email )

Gustav-Stresemann-Ring 3
Wiesbaden, Hessen 65189
Germany

Leibniz Institute for Financial Research SAFE

House of Finance
Theodor-W.-Adorno-Platz 3
Frankfurt am Main, 60323
Germany

HOME PAGE: http://www.safe-frankfurt.de

Silvia Steininger

Max Planck Institute for Comparative Public Law and International Law ( email )

Im Neuenheimer Feld 535
69120 Heidelberg, 69120
Germany

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