In:
British Journal of Political Science, Cambridge University Press (CUP), Vol. 52, No. 4 ( 2022-10), p. 1944-1953
Abstract:
Developing countries are often thought to be particularly exposed to the constraints of global markets. Facing scrutiny from foreign investors, why do developing-country governments enter international bond markets, especially when they can access cheaper finance from international financial institutions? I argue that borrowing governments' perception of market constraints depends on global liquidity. When bond markets are highly liquid, investors become more risk acceptant and governments perceive the political costs of borrowing to be lower, especially compared to the conditionality of concessional loans. I use data on the timing of bond issues and three case studies—Ethiopia, Ghana, and Kenya—to demonstrate that choices to issue debt were shaped by global liquidity. These findings nuance debates about how markets constrain governments, emphasizing that market constraints are conditional on systemic factors, including, global liquidity.
Type of Medium:
Online Resource
ISSN:
0007-1234
,
1469-2112
DOI:
10.1017/S0007123421000405
Language:
English
Publisher:
Cambridge University Press (CUP)
Publication Date:
2022
detail.hit.zdb_id:
1466320-X
SSG:
3,6
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