The Greek debt restructuring of 2012 stands out in the history of sovereign defaults. It achieved very large debt reliefover 50 percent of 2012 GDP-with minimal financial disruption, using a combination of new legal techniques, exceptionally large cash incentives, and official sector pressure on key creditors. But it did so at a cost. The timing and design of the restructuring left money on the table from the perspective of Greece, created a large risk for European taxpayers, and set precedents-particularly in its very generous treatment of holdout creditors-that are likely to make future debt restructurings in Europe more difficult. JEL Codes: F34

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Abstract. One of the primary policy initiatives instituted in response to the Eurozone sovereign debt crisis is a requirement that all Eurozone sovereign bonds issued after January 1 2013 include provisions referred to as Collective Action Clauses or CACs. These CACs allow for a super-majority of creditors to impose restructuring terms on minority holdouts. This article assesses the likely effect of this proposal on the borrowing costs of sovereign debtors. Contrary to much of the literature, we find that the presence of CACs leads to a lower cost of capital, especially for below-investment grade bonds.JEL Classification: F34, F36, G15, G12, H63, K12

We report evidence from a dataset of federal district judges from 2001 to 2002 that district judges adjust their opinion-writing practices to minimize their workload while maximizing their reputation and chance for elevation to a higher court. District judges in circuits with politically uniform circuit judges are better able to predict what opinions will get affirmed by the circuit court, leading to higher publication rates and a higher affirmance rate. In contrast, district judges in circuits with politically diverse circuit judges are less able to predict the preferences of the reviewing circuit court panel, leading district judges to publish fewer but higher quality opinions in an effort to maximize their affirmance rate. IntroductionA large literature has found that Supreme Court justices and federal appellate judges decide cases at least partly on the basis of ideological preferences. Scholarship on district court judges has been less extensive, and its results less consistent. Some research finds that district court judges are influenced by ideological preferences, especially in sentencing and cases involving salient topics, but other research finds little or no correlation between ideological preferences and decisions (Rowland and Carp 1983;Rowland and Carp 1996;Ashenfelter, Eisenberg and Schwab 1995).The most plausible explanation for these different results is that district judges are more closely supervised than are judges higher up in the court hierarchy. Supreme Court justices do not face review and appellate court judges face review in only a tiny fraction of the cases they decide. By contrast, district judges are routinely subject to appellate review. Reversal can be a burden for district judges, requiring them sometimes to conduct new trials and usually to hear new motions. At the same time, pressure is put on district judges to clear their dockets-to decide cases expeditiously. Reversal is also potentially embarrassing and detrimental to a trial judge's prospects for promotion to the appeals courts. Judges on the appeals courts, by contrast, have little prospect of promotion.We suspect that district judges care as much about political outcomes as appellate judges do, but cannot advance their ideological preferences because they are subject to appellate review.Thus, we hypothesize that district judges care about minimizing their workload and maximizing their reputation (and hopes for elevation to an appellate court) by avoiding appellate reversal.2 If 2 The literature on judging frequently mentions the aversion of judges to reversal (Higgins and Rubin 1980; Drahozal 1988;Watson 1988). Research on the appeals courts, however, has found little evidence of reversal aversion (Klein and Hume 2003;Cross 2007; Songer, Humpries and Sarver 2003). With respect to the district 4 district judges want to avoid reversal, and appellate judges decide cases on the basis of political preferences, then district judges will decide cases on the basis of the political preferences of appellate judges. When d...