Politics of International Finance

Session Submission Type: Full Paper Panel

Session Description

What shapes the interactions between states and global financial markets? What impacts does this interaction have on domestic politics, including electoral politics? How do states use tools in international financial markets to achieve their aims? This panel examines the politics of contemporary international finance, using data at different levels of analysis to examine the exercise of power by private and public actors in global financial markets.
Two of the five papers examine the reaction of private financial actors to domestic politics and policies. Da Cunha uses data from equity options markets to show that election-induced uncertainty not only triggers short-term market volatility but also leads to long-run economic policy uncertainty. Cormier and Naqvi demonstrate that the providers of widely used local bond indexes, such as JP Morgan, shape access to capital by including or excluding countries based on domestic policies and institutions, thereby shaping access to capital. The three final papers look at public actors in international finance. McDowell and Steinberg’s paper investigates the impact of China’s bilateral swap lines to Argentina on public opinion of China, using survey data from 2023 to show a polarizing effect that depends on respondents’ alignment with the governing regime. Zeitz and Mosley analyze the concessionality of bilateral loans, demonstrating how the terms of bilateral loans are influenced by geopolitical alliances and commercial ties. Fleiner examines the governance of sovereign wealth funds, using original data on the structure of these funds to show that variation reflects prevalent beliefs about the state’s role in the economy.

Sub Unit

• Division 16: International Political Economy

Cosponsor

• Division 17: International Collaboration

Individual Presentations

• International Financial Markets, Electoral Uncertainty, and Economic Performance - Raphael Cunha, King's College London

• Do Swap Lines Help China Win Friends and Influence? Evidence from Argentina - Daniel McDowell, Syracuse University; David A. Steinberg, Johns Hopkins University

• Sovereign Wealth Fund Governance and Changing State-Market Relationships - Katharina Fleiner, University of Geneva

• Index Providers as Gatekeepers in Local Currency Bond Markets - Ben Cormier, University of Strathclyde; Natalya Naqvi, London School of Economics

• The Pricing and Politics of Bilateral Sovereign Lending - Alexandra Olivia Zeitz, Concordia University; Layna Mosley, Princeton University

Chair

• Julia Gray University of Pennsylvania

Discussants

• Julia Gray University of Pennsylvania

• Stephen B. Kaplan George Washington University