Google full text of our books:


Lending to the Borrower from Hell:
Debt, Taxes, and Default in the Age of Philip II
Mauricio Drelichman & Hans-Joachim Voth

Paperback | 2016 | $27.95 | £22.95 | ISBN: 9780691173771
328 pp. | 6 x 9 1/4
Hardcover | 2014 | $39.95 | £32.95 | ISBN: 9780691151496
328 pp. | 6 x 9 1/4 | 4 halftones. 32 line illus. 29 tables.
Add to Shopping Cart

eBook | ISBN: 9781400848430 |
Our eBook editions are available from these online vendors

Reviews | Table of Contents
Prologue[PDF] pdf-icon

Google full text of this book:

Why do lenders time and again loan money to sovereign borrowers who promptly go bankrupt? When can this type of lending work? As the United States and many European nations struggle with mountains of debt, historical precedents can offer valuable insights. Lending to the Borrower from Hell looks at one famous case--the debts and defaults of Philip II of Spain. Ruling over one of the largest and most powerful empires in history, King Philip defaulted four times. Yet he never lost access to capital markets and could borrow again within a year or two of each default. Exploring the shrewd reasoning of the lenders who continued to offer money, Mauricio Drelichman and Hans-Joachim Voth analyze the lessons from this important historical example.

Using detailed new evidence collected from sixteenth-century archives, Drelichman and Voth examine the incentives and returns of lenders. They provide powerful evidence that in the right situations, lenders not only survive despite defaults--they thrive. Drelichman and Voth also demonstrate that debt markets cope well, despite massive fluctuations in expenditure and revenue, when lending functions like insurance. The authors unearth unique sixteenth-century loan contracts that offered highly effective risk sharing between the king and his lenders, with payment obligations reduced in bad times.

A fascinating story of finance and empire, Lending to the Borrower from Hell offers an intelligent model for keeping economies safe in times of sovereign debt crises and defaults.

Mauricio Drelichman is associate professor in the Vancouver School of Economics at the University of British Columbia and a fellow in the Institutions, Organizations, and Growth program of the Canadian Institute for Advanced Research. Hans-Joachim Voth is ICREA Research Professor in the Economics Department at Universitat Pompeu Fabra, Barcelona, where he is also a member of the Centre for Research in International Economics. He is the author of Time and Work in England during the Industrial Revolution and coauthor of Prometheus Shackled.


"A thoroughly enjoyable economic history book with great relevance for the present debate on sovereign borrowing."--Diane Coyle, Enlightened Economist

"Lending to the Borrower from Hell is a wonderful example of what becomes possible when one takes economic theory on a trip to the archive and actually reads the small print of each contract. It provides for the first time an economically sound explanation for Spain's ability to borrow in the sixteenth century that actually fits the facts. That is an outstanding achievement."--Regina Grafe, EH.Net

"[T]his innovative monograph substantially enriches our understanding of Castile's government borrowing, as well as the nature of sovereign default in early modern Europe. And it will most certainly conquer a central place in the literature and future debates on public debt and finance from a historical perspective."--Benoît Maréchaux, CritCom

"Intensely researched."--Elvira Vilches, Renaissance Quarterly


"Sovereign debt is a paradox: why lend to a ruler who can summarily change the terms and conditions under which he repays? This is a deep question on which only history, ultimately, can shed light. Drelichman and Voth do the history right in this detailed, rigorous study of the notorious serial defaulter Philip II."--Barry Eichengreen, University of California, Berkeley

"Drelichman and Voth delve into old Spanish archives to bring out a compelling story of power and profit in imperial finance. Using modern economic analysis, they offer a deeper understanding of the problems of sovereign debt and default, from the sixteenth-century world of King Philip II to our own world today."--Roger Myerson, University of Chicago and Nobel Laureate in Economics

More Endorsements

Table of Contents:

CHAPTER 1 Lending to the Sound of Cannon 9
CHAPTER 2 Philip's Empire 45
CHAPTER 3 Taxes, Debts, and Institutions 74
CHAPTER 4 The Sustainable Debts of Philip II 105
CHAPTER 5 Lending to the Borrower from Hell 132
CHAPTER 6 Serial Defaults, Serial Profits 173
CHAPTER 7 Risk Sharing with the Monarch 211
CHAPTER 8 Tax, Empire, and the Logic of Spanish Decline 243
EPILOGUE Financial Folly and Spain's Black Legend 271


Subject Areas:

Shopping Cart options:

  • For ebooks:

Our eBook editions are available
from these online vendors:

  • Amazon Kindle Store
  • Apple iBooks
  • Barnes & Noble Nook Store
  • Google Play eBook Store
  • Kobo eBook Store
  • Many of our ebooks are available through
    library electronic resources including these platforms:

  • Books at JSTOR
  • Ebrary
  • Ebook Library
  • EBSCO Ebooks
  • MyiLibrary
  • Dawsonera (UK)

    • For hardcover/paperback orders in United States, Canada, Latin America, Asia, and Australia

     Paperback : $27.95 ISBN: 9780691173771

    Add to shopping cart

     Hardcover : $39.95 ISBN: 9780691151496

    Add to shopping cart
    View contents of your shopping cart

    • For hardcover/paperback orders in Europe, Africa, the Middle East, India, and Pakistan

     Hardcover  £32.95 ISBN: 9780691151496

    Add to shopping cart

     Paperback  £22.95 ISBN: 9780691173771

    Add to shopping cart
    View contents of your shopping cart

    Prices subject to change without notice

    File created: 9/7/2017

    Questions and comments to:
    Princeton University Press

    New Book E-mails
    New In Print
    PUP Blog
    Princeton APPS
    Sample Chapters
    Princeton Legacy Library
    Exam/Desk Copy
    Recent Awards
    Princeton Shorts
    Freshman Reading
    PUP Europe
    About Us
    Contact Us
    PUP Home

    Bookmark and Share 
    Send me emails
    about new books in:
    European History
    More Choices