Puerto Rico's PROMESA oversight board
PROMESA gave a presidentially appointed board final certification power over Puerto Rico's fiscal plans and budgets, review authority over laws and borrowing, and exclusive representation of covered public entities in bankruptcy-like restructuring. The framework supplied a binding debt-adjustment mechanism that Puerto Rico lacked and sharply reduced major debt claims, but it located locally consequential fiscal judgment in an institution Puerto Rican voters cannot elect or supervise. Improved balances and debt levels coexist with delayed audits, unresolved electric-utility debt, high professional costs, service burdens, and an exit test the board itself certifies.
Can an external fiscal authority solve a public-debt collective-action problem without making democratic legitimacy and local institutional capacity costs outside its ledger?