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Sub-sovereign bond buyback: a way forward for debt-laden regions in austerity |
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| Authors: | Davide Eltrudis Stephen J Bailey Patrizio Monfardini |
| Institution: | 1. Department of Economic and Business Sciences, University of Cagliari, Italy![ORCID Icon]({"type":"image","src":"/templates/jsp/images/orcid.png"} "ORCID Icon") https://orcid.org/0000-0002-5821-2634;2. Department of Law, Economics, Accountancy &3. Risk, Glasgow Caledonian University, UK;4. Department of Economic and Business Sciences, University of Cagliari, Italyhttps://orcid.org/0000-0001-8615-4841 |
| Abstract: | ABSTRACTPrevious academic literature has criticised bond buyback as a ‘”boondoggle” benefiting a country’s creditors’—meaning that buybacks are a wasteful use of public money. This paper challenges the narrow financial–economic perspective behind that statement by adopting a broader socio-political framework that includes the potential benefits of buyback for citizens, not just financial market costs. In particular, buyback does not necessarily require a budget surplus via higher local taxes and/or increased austerity measures. |
| Keywords: | Bond buyback ‘boondoggle’ creative accounting debt management fiscal consolidation public sector austerity |