Globalization and Austerity Politics in Latin America
In an age of financial globalization, are markets and democracy compatible? For developing countries, the dramatic internationalization of financial markets over the last two decades deepens tensions between politics and markets. Notwithstanding the rise of left-leaning governments in regions like Latin America, macroeconomic policies often have a neoliberal appearance. When is austerity imposed externally and when is it a domestic political choice? By combining statistical tests with extensive field research across Latin America, this book examines the effect of financial globalization on economic policymaking. Kaplan argues that a country's structural composition of international borrowing and its individual technocratic understanding of past economic crises combine to produce dramatically different outcomes in national policy choices. Incorporating these factors into an electoral politics framework, the book then challenges the conventional wisdom that political business cycles are prevalent in newly democratizing regions. This book is accessible to a broad audience and scholars with an interest in the political economy of finance, development and democracy, and Latin American politics.
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1999 elections Alejandro Foxley Argentina Author’s interview balance bank lending beneﬁts billion bond ﬁnance bond markets boom boost borrowing Brazil Brazilian budget deﬁcits budgetary Cardoso central bank central bank independence Chapter Chavez Chile Chilean conditionality constraints country’s creditors debt decentralized bond democracy democratic developing countries domestic Domingo Cavallo economic growth economic orthodoxy economic policy economic team Ecuador elections electoral expansionary external Fernando Henrique Cardoso Finance ﬁnancial markets ﬁnancial means ﬁnd ﬁrst ﬁscal ﬁscal policy funding global bond markets global ﬁnancial government’s hyperinﬂation income inﬂation aversion inﬂation control inﬂation crisis Inﬂation Inﬂation inﬂation-averse inﬂationary crises inﬂuence institutional interest rates investors Latin American low inﬂation Lula macroeconomic macroeconomic policy Menem Minister monetary policy neoliberal nomic Notwithstanding ofﬁce partisan percentage points Political Austerity Cycle political austerity theory political business cycle politicians President presidential price stability reﬂected regression revenues Ricardo Lagos shocks social technocratic unemployment variable Venezuela voters