The tale of three public debt crises in Tunisia, Egypt, and the Ottoman Empire in the 1860s and 1870s

ABSTRACT The paper provides a comprehensive comparison of the experiences of debt accumulation and of the debt crises which took place within less than a decade during the second half of the nineteenth century in Tunisia, Egypt and the Ottoman Empire. The comparison covers the period from the 1850s to the 1880s, as the three countries were attempting to modernize and meet the challenges posed by the industrial revolution and the European expansion globally. They quickly faced financial constraints, increased their external borrowing and ran into crisis. These crises, which were triggered from 1867 to 1876, were part of the second wave of crises during the nineteenth century. The countries differed considerably in the way the crises were managed and resolved. In this context, based on available information, the paper provides a quantitative assessment of the debt burden and the various indicators of creditworthiness using constructed series on total GDP for the three countries for the period 1860–1884. This allows for a comparison of the full processes of debt accumulation, the triggering of the crises and their resolution. In doing so it brings together a wealth of data and information about the factors which impacted creditworthiness and capacity to service debt, relating to trade and fiscal revenues, which played a major role in determining the severity of the crises and the way they were resolved.