Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/249166 
Year of Publication: 
2022
Series/Report no.: 
DIW Discussion Papers No. 1992
Publisher: 
Deutsches Institut für Wirtschaftsforschung (DIW), Berlin
Abstract: 
We investigate how internal distribution motives can interfere with the economic objectives of capital controls. In order to do this, we provide a model showing that elite capture can affect optimal debt repatriations and the management of official reserves under capital controls. Relying on these theoretical insights and a wealth of quantitative and qualitative historical evidence, we study one of history's largest debt repatriations - that of 1930s Germany. We show that the authorities kept private repatriations under strict control, thus avoiding detrimental macroeconomic effects, while allowing discretionary repatriations in order to reap internal political benefits.
Subjects: 
Sovereign risk
Capital controls
Elite capture
Germany
Nazi regime
Foreign debt
Secondary markets
JEL: 
E65
F38
H63
N24
Document Type: 
Working Paper

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