Globalization and austerity politics in Latin America / Stephen B. Kaplan.

Includes bibliographical references (pages 293-314) and index.

1. Introduction -- 2. Globalization and austerity politics -- 3. The political economy of elections -- 4. The electoral boom-bust cycle -- 5. From gunboat to trading-floor diplomacy -- 6. When Latin American grasshoppers become ants -- 7. The political austerity cycle -- 8 Conclusion -- Appendix A. Field research interviews.

"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 long-standing 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 such austerity imposed externally and when is it a domestic political choice? Employing a multi-method research strategy that includes statistical tests and extensive field research from across Latin America, Stephen B. Kaplan builds and tests a theory that explains the effect of financial globalization on economic policy making. Focusing on both the structural and individual influences on policy making, he argues that a country's composition of international borrowing and its technocratic understanding of past economic crises combine to produce dramatically different outcomes in national policy choices. Incorporating these factors into an electoral politics framework, Kaplan's book then challenges the conventional wisdom that political business cycles are most likely in newly democratizing regions. Inflation-spurring expansions may occur when countries are unhindered by bond market indebtedness and inflation crisis legacies, but otherwise a political austerity cycle emerges characterized by macro- economic discipline. This book is targeted toward a broad audience within political science, economics, and Latin American politics, but is especially relevant for scholars of political economy of global finance, development and democracy, and the politics of economic policy making."--Page [i].

"Developing country politicians in a financially globalized world suffer a similar fate. Hoping to lift their countries to development's pinnacle, they toil against the fierce force of globalization. The repeatedly roll the policy boulder up the mountain. Hoping to please mercurial markets, governments cut spending, hike interest rates, and balance budgets. With each economic crisis, however, the rock repeatedly tumbles down the mountain. In this manner, financial volatility has wreaked havoc on developing country economies over the last two decades. Why are some countries able to surmount the gravity of globalization, while others suffer from a Sisyphus-like misfortune? Let us begin by taking a brief South American sojourn to Argentina and Venezuela. With the rise of the Latin American left over the last decade, scholars and the popular press have often placed these two countries under a similar radical or populist banner. They share other political and economic characteristics too. They are both presidential, upper middle-income countries that feature comparatively sized economies and populations. In terms of their macroeconomic approaches, however, their policy stances ..."--Page 1.

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