Kiel Institute research: returns on external sovereign bonds have been averaged at 7% annually across two centuries.
Excerpt from the Article
(...) Research on hard-currency bonds since Britain and Prussia defeated France at the Battle of Waterloo in 1815 shows that on average the return from lending to governments issuing external debt in sterling or dollars delivered a return close to U.S. stocks, with lower volatility. Lending to serial defaulters was even more lucrative, because the high rates Western investors demanded more than offset the terrible repayment record of emerging-market debtors, according to a new study by Josefin Meyer and Christoph Trebesch of the Kiel Institute for the World Economy and Harvard's Carmen Reinhart. In other words, you're paid enough along the way to justify the occasional severe capital loss from default—on average, and over a long period.