What made you decide to study sovereign debt governance? 

I have always been fascinated by the interaction between politics and economics, especially in the context of crises. While my early interest was in monetary policy, the Eurozone sovereign debt crisis made financial policy so salient in the domestic discourse of my home country (Italy), and in European affairs more generally, that it was quite natural for me to shift my focus to sovereign debt governance. 

Can you describe your thesis questions and methodology?

In my PhD thesis, I model sovereign debt governance as a complex adaptive system – i.e., as a dynamic environment where diverse agents interact with, and adapt to, one another via a network of connections. In the three papers that make up my dissertation, I thus explore some of the sources of such connections. 

In the first paper, titled “Policy Learning and Diffusion in Sovereign Debt Governance: A Network Model of Governments' Repayment Decisions”, I consider the fact that sovereign debtors exist and operate in a broader set of institutions, where this creates channels of transmission for the diffusion of debt crisis resolution policies. Whether and how sovereigns’ repayment behaviour spreads across countries is the core of the paper, which fits a longitudinal network model to test for the occurrence of learning mechanisms in sovereign debt governance. 

As to the second paper of my dissertation, “Rethinking Sovereign Debt Restructurings: A Computational Model of Two-Level Negotiations”, I consider actors’ involvement in two-level processes of crisis resolution, and explore how the distribution of actors’ preferences impacts the policy space over which they operate – thus the conditions under which (non-)cooperation will emerge. To do so, I develop an agent-based computational model where fiscal policy decisions result from repeated interactions between the representatives of debtor and creditor institutions, based on the preferences that emerge from discussions within the two groups. 

Finally, my third paper, “Interspecific Interactions between Chinese and Traditional Creditors: An Ecological Model of Global Development Finance”, focuses on the interaction of creditors that operate in the shared environment of global development finance, while adopting different lending schemes. Here, I take an ecological perspective, and analyse relations between Chinese and traditional creditors through the lens of a two-species model of inter-creditor interactions; in particular, I fit a generalised Lotka-Volterra model to data on the actors’ overseas engagement.

What are your major findings?

My complex systems approach allows me to go beyond state-of-the-art analyses of sovereign lending and default, namely through a combination of original arguments and new modelling techniques. At the theoretical level, I complement existing theories by predicting patterns of behaviour that previous research failed to explain, and by exploring a range of interaction dynamics that go beyond the typical distinction into cooperation and competition. At the methodological level, I use techniques that allow me to capture system dynamics, and am thus able to observe how aggregate outcomes come to emerge. 

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Alessandra Romani defended her PhD thesis in International Relations/Political science in December 2022. Professor Ugo Panizza presided the committee, which included Emeritus Professor David Sylvan, Thesis Director, and Professor Robert Franzese, Department of Political Science, University of Michigan, USA.
During her doctoral studies, Alessandra was a teaching and a research assistant at the Institute and a visiting scholar at the University of Michigan’s Center for Political Studies. She is now a postdoctoral fellow in the project “The Global Governance of Ideas: International Organisations as Agents of Policy Diffusion” at Royal Holloway, University of London. She holds a Bachelor in Economics from the University of Pavia and a Master in Comparative and International Studies from ETH Zürich.

Citation of the PhD thesis:
Romani, Alessandra. “The Complexity of Sovereign Debt Governance: How Heterogeneity and Interdependence Shape Policy in Times of Crisis.” PhD thesis, Graduate Institute of International and Development Studies, Geneva, 2022.

Members of the Geneva Graduate Institute can access the PhD thesis on this page of the Institute’s repository. Others can contact Alessandra Romani at alessandra.romani@graduateinstitute.ch.

Interview by Nathalie Tanner, Research Office.
Banner picture: part of a photo by optimarc/Shutterstock.com.