Why New States Accept Old Obligations

This Article builds on prior legal and policy appraisals of what happens to commercial obligations upon state succession. The author analyzes two recent successions in Kosovo and Iraq, testing the predictive and normative aspects of a policy-oriented approach. Thus, this Article contributes fresh insight into the continued use of the policy-oriented approach to state succession. Specifically, this Article confirms that international legal rules governing the transmission of debt obligations to successor states still do not exist. Policy considerations will inform the decision whether to bind new states to the agreements of their predecessor’s. The author also shows that application of the policy-oriented approach is not necessarily triggered by the formal attainment of statehood, but can be prompted by calls for self-determination by people of a territory. The formal distinction between state and government succession has eroded to the point that a new framework of analysis is supplanting that distinction. The author concludes that, in some disputes, alternative configurations of statehood may, or at least ought to, replace Westphalian statehood in order to accommodate competing policies of self-determination and global stability.

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