TY - JOUR
T1 - Speak clearly and carry a big stock of dollar reserves
T2 - Sovereign risk, ideology, and presidential elections in Argentina, Brazil, Mexico, and Venezuela
AU - Spanakos, Anthony Peter
AU - Renno, Lucio R.
PY - 2009/10
Y1 - 2009/10
N2 - Partisan theories of political economy expect that bondholders will panic with the election of a left-wing presidential candidate. The latter seems to be what happened in Brazil in the 2002 presidential elections. However, quantitative analysis of perceptions of sovereign credit risk in Argentine, Brazilian, Mexican, and Venezuelan presidential elections from 1994 until 2007 shows no real evidence of a link between partisanship and perceptions of risk, even if the left-right divide is further broken down into left, center-left, center-right, right. Instead, international and domestic economic fundamentals have a stronger influence on risk evaluations. Qualitative analysis of the individual presidential elections shows the importance of policy uncertainty in explaining why certain electoral periods seemed more critical than others and how bondholders select between multiple equilibria. This research helps shift political analysis away from partisanship and more in the direction of policies and articulation.
AB - Partisan theories of political economy expect that bondholders will panic with the election of a left-wing presidential candidate. The latter seems to be what happened in Brazil in the 2002 presidential elections. However, quantitative analysis of perceptions of sovereign credit risk in Argentine, Brazilian, Mexican, and Venezuelan presidential elections from 1994 until 2007 shows no real evidence of a link between partisanship and perceptions of risk, even if the left-right divide is further broken down into left, center-left, center-right, right. Instead, international and domestic economic fundamentals have a stronger influence on risk evaluations. Qualitative analysis of the individual presidential elections shows the importance of policy uncertainty in explaining why certain electoral periods seemed more critical than others and how bondholders select between multiple equilibria. This research helps shift political analysis away from partisanship and more in the direction of policies and articulation.
KW - Latin America
KW - Partisan theories
KW - Political economy
KW - Political uncertainty
KW - Sovereign risk
UR - http://www.scopus.com/inward/record.url?scp=70349266450&partnerID=8YFLogxK
U2 - 10.1177/0010414009331711
DO - 10.1177/0010414009331711
M3 - Article
AN - SCOPUS:70349266450
SN - 0010-4140
VL - 42
SP - 1292
EP - 1316
JO - Comparative Political Studies
JF - Comparative Political Studies
IS - 10
ER -