Bubbles of Agency: Narratives of Finance in Latin America

38 Pages Posted: 10 Jun 2020

Date Written: April 10, 2020

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

Suggested Citation

Hernandez Sanchez, Alfredo, Bubbles of Agency: Narratives of Finance in Latin America (April 10, 2020). Available at SSRN: https://ssrn.com/abstract=3601411 or http://dx.doi.org/10.2139/ssrn.3601411

Alfredo Hernandez Sanchez (Contact Author)

IBEI ( email )

Ramon Trias Fargas 25-27
Barcelona, Barcelona 08005
Spain

HOME PAGE: http://alhdzsz.net

Central European University (CEU) ( email )

Nador 9
Budapest, 1051
Hungary

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