Bubbles of Agency: Narratives of Finance in Latin America

Abstract

What drives world leaders to act in good faith or in defiance of the norms that underpin sovereign lending? I propose an analytic framework to study the impact of economic narratives on emerging-market stances towards the international regime for sovereign debt. Latin American leaders draw on two narratives of the global political-economy: a) one which characterizes the market-mechanisms-based financial system as a zero-sum game which perpetuates economic hierarchies, and b) one which stresses its developmental potential and characterizes it as a positive-sum game. I employ Computational Text Analysis (CTA) methods to measure how often the topic of international finance has been discussed in United Nations General Assembly (UNGA) speeches (1970-2018) and how it has been framed. I explore two paradigmatic cases from Latin America where a pro-active foreign economic policy was pursued informed by opposing economic narratives. The first is Mexico's promotion of market mechanisms to reform the international financial architecture under Vicente Fox with the diffusion of Collective Action Clauses and the 2002 Monterrey Consensus. The second considers the politically motivated 2008 Ecuadorian default and Rafael Correa's denunciation of international financiers.

Keywords: Topic Modeling, Foreign Economic Policy, UN Speeches, Sovereign Creditworthiness