The Paris Club, Latin America, and the Crafting of Debt Relief, 1956–66

This paper investigates the origins of the Paris Club through its initial debt relief operations with Argentina, Brazil, and Chile between 1956 and 1966. Originally established as a multilateral forum to assist post-Perón Argentina, the Paris Club later emerged as a key actor during the Latin American debt crisis of the 1980s and remains central to contemporary debates on sovereign debt. Existing scholarship on the institution has largely focused on its more recent operations or on the long-run effects of debt restructuring on economic growth. By contrast, this paper delves into the Paris Club’s early decades to examine how South American cases (Argentina 1956, 1962 and 1965; Chile 1965, and Brazil 1961 and 1964) led creditor countries to define, adapt and reshape emerging rules for the provision of sovereign debt relief, ranging from non-discriminatory treatment to conditionality. Drawing on previously untapped archival evidence from multilateral agencies and national governments, it explores how South American nations actively and strategically navigated between their own needs for extraordinary financial assistance, their partners’ geopolitical objectives in the Cold War context, and the priorities of the IMF, the World Bank, and the Inter-American Development Bank. By examining the early stages of foreign debt renegotiation, the paper also seeks to add nuance to centre-periphery accounts in documenting Latin America’s room for manoeuvre within postwar international financial negotiations.