subsovereign

Subsovereign is an adjective and noun used to describe authorities, entities, or obligations that exist within a sovereign state but are not themselves sovereign. In political science, a subsovereign unit refers to subnational governments or authorities—such as states, provinces, regions, municipalities, or special districts—that have constitutional or administrative autonomy but remain subject to central government law and control.

In international finance and public debt markets, the term subsovereign typically designates debt issuers that are not the national government but operate with some degree of autonomy. Examples include state or provincial governments, municipalities, and certain state-owned enterprises, depending on national law. Subsovereign entities may issue bonds or borrow in domestic or, less commonly, international markets. Their credit risk is generally influenced by their own fiscal policies and revenues, but in many cases the central government can guarantee or support debt, or there may be legal limits on guarantees; as a result, credit ratings of subsovereign borrowers and the central government can diverge.

The concept helps distinguish financial and political risk from that of a sovereign government. Subsovereign status also appears in governance discussions about decentralization, fiscal federalism, and intergovernmental relations, highlighting the division of powers and responsibilities between central authorities and subnational units.