This paper examines why some countries are able to regain access to international capital markets immediately after resolving a default, whereas other countries appear to be punished for longer periods. We …rst develop a methodology to determine when market access occurs after default settlement. Our main …ndings from examining the duration of exclusion from international capital markets between 1980-2005 in Latin American countries are the following: i) countries regain partial market access after 1.8 years on average (median of 1.0 year) while it takes 4.8 years on average (median of 4.0 years) to regain full market access; ii) partial market access depends mostly on short-term domestic and external conditions; iii) full market access depends primarily on investors’perceived outlook for a country; and iv) size matters, with large economies regaining market access twice as fast
as small countries.