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We show that a country's international political stance predicts its sovereign debt default risk by shaping long-term fluctuations in capital inflows. After a default, robust international political relations facilitate smoother recov-ery for a nation with less pronounced declines in output and credit, and smaller increases in sovereign bond yields. We introduce a bilateral interna-tional political relations (IPR) index for 152 countries from the 1880s on-wards, summarizing military cooperation and diplomatic integration among nations. The IPR index can serve as an early warning indicator, offering accurate signals quantitatively similar to better-known crisis predictors, in-cluding the debt-to-GDP ratio, inflation, and domestic political stability.
