Summary: Globalization and Austerity Politics in Latin America (Cambridge University Press, Cambridge Studies in Comparative Politics Series, 2013)

In Globalization and Austerity Politics, I examine the question of whether or not markets and democracy are compatible in an age of financial globalization. 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 policy making. I argue 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. 

For a sample book chapter, see Chapter 2: Globalization and Austerity Politics.


"A thoroughly analytical work with the potential to transform thinking about globalization and austerity measures worldwide. Choice

– A Choice’s 2013 Outstanding Academic Titles in the Social and Behavioral Sciences. 

“Today’s integrated capital markets provide great opportunities for, and impose tight constraints on, governments in the developing world. Just how great are the opportunities, and how tight the constraints, is the topic of much scholarly and popular debate. In Globalization and Austerity Politics in Latin America, Stephen Kaplan provides a careful analysis of how and why Latin American governments have responded to the contemporary international economic environment. He shows, with both cross-national statistical analysis and careful case studies, that governments respond to both international financial and domestic political pressures. Globalization can constrain national policies, but it does so within a domestic political context. This is a careful, thoughtful study that will be of great interest to scholars and students of Latin America, and of the political economy of development more generally.”

– Jeffry Frieden, Harvard University

"Why have governments on the left in Latin American adopted surprisingly conservative macroeconomic policies?  Kaplan offers a sophisticated explanation of when and why we have seen this shift.  By focusing on the internal political dynamics of financial market actors, he makes a convincing--yet nuanced--argument about the power of bond markets to shape government policies in a globalized world." 

– Kathleen McNamara, Georgetown University

“In an era of financial openness, some developing countries enjoy more autonomy vis-à-vis capital markets than others. Why? Stephen Kaplan convincingly suggests that the ways in which governments finance their debt and the ways in which political elites view their country’s economic history both play a role. In nations that have experienced inflationary crises and that borrow via bonds (rather than from banks), conditions are ripe for a ‘political austerity cycle.’ Kaplan’s analysis points to the importance of both ideational and material factors, and of both domestic and international forces, on elites’ behavior in contemporary Latin America.”

– Layna Mosley, University of North Carolina at Chapel Hill

“In this deeply insightful and original book, Stephen Kaplan not only offers a fresh interpretation of how global financial markets constrain domestic policymakers in developing countries, but he explains the conditions under which these constraints are more or less confining.  Through cross-national statistical tests and comparative case studies from Latin America, Kaplan demonstrates how inflationary experiences and the shift from bank lending to bond market financing shape democratic business cycles, producing austerity measures or stimulus policies. This is a first-rate contribution to the study of the political economy of democracy and development, and it breaks new ground in understanding how domestic policy choices are conditioned by international financial dependence.”

– Kenneth M. Roberts, Cornell University

“Kaplan's book represents a pathbreaking study in international political economy. His work challenges the conventional wisdom about how governments use economic policy before elections. For many decades, scholars have debated whether governments engage in inflationary policies to spur economic growth as they head toward elections, in the hope of retaining power. Kaplan turns this debate on its head, showing that some governments actually apply the financial "brakes" before an election, implementing policies that are anti-inflationary. He grounds his explanation in international and domestic factors. At the international level, some governments that operate in a financially globalized world cannot obtain sufficient access to capital. At the domestic level, some governments face inflation-averse electorates, who seek protection from income shocks and take unsustainable stimulus policies before an election as a bad sign. The book is a must-read for students and scholars of political economy.”

– James Vreeland, Georgetown University


The book has been featured in several blogs this past year, including the Economic Sociology and Political Economy (ES/PE) Community, Presidential Power, and the Getulio Vargas Foundation’s Center for Politics and Economics in the Public Sector (CEPES). 

Summary: The China Boom in Latin America: Neoliberalism in Retreat? (Under contract with Cambrdge University Press; book manuscript in progress).

This book explores the relationship between China’s state-driven expansionism in the Western Hemisphere and Latin America’s compliance with neoliberal governance models. The central argument is that the availability of non-Western financing and trade sources increases the policy discretion of Latin American governments to more heavily intervene in their economies or to pursue alternative development models. Ironically, however, it has also made the region more vulnerable to industrial stagnation and global commodity shocks. For the 2014-2015 academic year, I received an external grant from the Smith Richardson Foundation to advance this book project. The research is also part of a consortium grant from the Minerva Initiative

© Stephen B. Kaplan 2016