Sovereign debt has traditionally been contrasted with corporate debt. Unlike corporations, sovereigns are immune from suit and asset seizure. Unlike corporations, sovereigns can't reliable promise a lender that it will have seniority over other lenders. Unlike corporations, sovereigns can't access bankruptcy. These and other distinctions drive much of the policy and academic thinking about sovereign debt.
But perhaps there are also lessons to be learned from consumer lending. This new paper
by Susan Block-Lieb at Fordham (abstract below) suggests that consumer debt may be a more helpful analogy, one with important policy implications. In both the sovereign and consumer context, she points out, lending is primarily income- rather than asset-based. In both contexts, restructuring is difficult primarily because income-based lenders cannot easily distinguish borrowers who will not pay from those who cannot pay. And in both contexts, there are substantial and cumulative incentives towards over-borrowing and over-lending.