DEBT.PT
Sovereign debt and private credit in Portugal (1668-1797)
(PTDC/HAR-HIS/28809/2017)
Abstract
This research project aims to analyse Portugal’s public debt in the early modern period and its impact on private credit. The central issue is the credibility of the commitment of the state in servicing the debt issued in the form of perpetuities. The conjecture is that the state's ability to borrow at decreasing interest rates was possible because colonial rents offered a credible collateral. Defaults could only have occurred at junctures of colonial empire economic contraction. Construction of the following sets of data would provide a confirmation of our conjecture: a) outstanding debt; b) tax revenue allocated to debt servicing; c) interest rates; d) debt management; e) creditors. To analyse the impact of the public credit on the private capital market, this project considers episodes of deferment of interest payments and of major changes in credit regulation conditioning investment decisions. The well-kept account books of Misericórdias (the one in Oporto, among others) provide a vantage point to jointly observe the dynamics of both credit markets.
By considering an uncharted historical case, this project contributes to the elaboration of a more comprehensive history of public debt in Europe, helping to corroborate or refute the state of the art based on the conventional case of success (England and Holland) or failure (Spain, Sweden or France) of the main territorial states.
Team
Consultants
Larry
Neal
University of Illinois at Urbana-Champaign
Jaime
Reis
ICS - Universidade de Lisboa
Rui Pedro Esteves
Graduate Institute of International and Development Studies, Geneva
Outputs
Publications
COSTA, Leonor Freire, MIRANDA, Susana Münch, NOGUES-MARCO, Pilar. Early Modern Financial Development in the Iberian Peninsula, Paul Bairoch Institute of Economic History, WP, 1/2021 https://archive-ouverte.unige.ch/unige:147492
Conference presentations
2020
November
39th APHES Meeting, University of Faro
Session: Three puzzles from early Portuguese sovereign debt (1500- 1793)
Org. António Castro Henriques
HENRIQUES, António Castro. Merchant, Soldier, Borrower, King. The first Portuguese emissions of juros (1500) in a comparative perspective.
COSTA, Leonor Freire, MIRANDA, Susana Münch. Disguised defaults and puzzling moments in debt management: Portugal’s public credit, 1600- 1780.
RODRIGUES, Lisbeth, SÁ, Isabel dos Guimarães. Private and public credit in the Misericórdia of Porto, 1574- 1800.
2021
February
Webinar: The shadow of the sovereign - Public and private credit markets in early modern Europe
March
RODRIGUES, Lisbeth. Between private and public credit: institutional creditors and investment patterns in eighteenth-century Portugal. European Social Science History Conference (online).
April
COSTA, Leonor Freire, RODRIGUES, Lisbeth. Indulgent creditors of kings. Dealing with sovereign default in eighteenth-century Portugal. Economic History Society Annual Conference (online).
July
40th APHES Meeting (online)
Session: The Shadow of the Sovereign I - Markets for public and private debt in early modern Europe (1400-1800)
Chairman: Álvaro Ferreira da Silva
FURIÓ, Antoni. Long-term credit and public and private debt in the Crown of Aragon in the late Middle Ages.
COSTA, Leonor Freire, MIRANDA, Susana Münch. Restoring credibility. How Portugal financed its political independence (1640-1682).
CHIARUTTINI, Maria Stella. Sovereign debt, private credit and early central banking in Italy, 1734-1894.
Session: The Shadow of the Sovereign II - Markets for public and private debt in early modern Europe (1400-1800)
Chairman: Jaime Reis
HENRIQUES, António Castro. Private and public interest rates in Portugal, 1500-1800.
MCCANTS, Anne. TBA.
RODRIGUES, Lisbeth, SÁ, Isabel dos Guimarães. Institutional investors and the private credit market in Portugal, 1656-1800.
WEBINAR
The Shadow of the Sovereign - Public and Private Credit Markets in Early Modern Europe
When
26 February 2021
Starting at 2.30pm
Intro
Portugal ran from 1500 to 1797, without major upheavals, a system of public debt with low and decreasing nominal interest rates at issuance. Despite these features, this experience attracted little research in either national or international circles. The FCT-funded research project Sovereign debt and private credit in Portugal – 1500-1797 conducted at the GHES-CSG (Centre for Economic and Social History – Lisbon School of Economics and Management, University of Lisbon) was designed to fill this major gap in European financial history. The project is aimed at both reconstructing the key variables (debt stocks, debt ratios to GDP and tax revenues, debt management) and observing the performance of the debt service via the account books of some of the main holders of debts instruments.
This webinar, which will be hosted by the GHES-CSG, intends to look at the comparative background to the Portuguese case and discuss preliminary findings of the project with specialists. Participants are expected to present their recent research on the issues approached in the project.
Webinar Programme
A collateral story of the rise of Portuguese sovereign debt
Larry Neal
University of Illinois at Urbana-Champaign
Necessity is the mother of invention? Supply versus demand-side drivers of state capacity in fourteenth- and fifteenth-century Europe
Tony Moore
ICMA Centre, Henley Business School, University of Reading
The Project Database
Bruno Lopes
Sovereign debt and private credit in Portugal
The Project First Results
Leonor Freire Costa & Susana Münch Miranda
Lisbeth Rodrigues & Isabel dos Guimarães Sá
António Castro Henriques
Coffee Break
In the Beginning Was Taxation: Taxes and Public Credit in 17th Century Castile
José Ignacio Andrés Ucendo
University of the Basque Country (Spain)
Stock market listing for sovereign bonds, 1872‐1911
Rui Pedro Esteves
Graduate Institute of International and Development Studies, Geneva
