Overview

Credit is the lifeblood of capitalism and development. Brazil, Russia, India, and China-also called BRICs-have become important creditors to developing countries. However, how will their loans affect economic development and democracy in recipient countries? We need to understand why governments accept Chinese over Western loan offers before we can predict their likely consequences. In Raise the Debt, Jonas B. Bunte systematically explains how governments choose among competing loan offers. Using statistical analyses and extensive interview data, he shows that the strings attached to loans vary across creditors. Consequently, one domestic interest group may benefit from Chinese credit but not U.S. loans, while the opposite is the case for other groups. Bunte provides evidence that governments cater to whichever domestic interest group is politically dominant when deciding between competing loan offers. Combining a comparative politics approach with international political economy methods, Raise the Debt shows how a deeper understanding of governments' borrowing decisions is critical for gaining insights into how these loans could impact growth and democracy on a global scale.

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9780190909581

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Reviews

Bunte reminds us that governments' borrowing is often multifaceted: they may access credit from international financial institutions, western governments, BRICS governments or private capital markets. Raise the Debt highlights the strategic nature of developing countries' choices among creditors. Through a combination of detailed country case studies, rich interview evidence and careful statistical analyses, Bunte convincingly demonstrates that this variation in sources of credit is related systematically to the domestic politics of debtor countries. -Layna Mosley, University of North Carolina at Chapel Hill Brazil, Russia, India, and especially China have become major lenders to the developing world. Raise the Debt investigates why developing countries decide to borrow money from these countries as opposed to more traditional alternatives like Western governments, international financial institutions, and private lenders. One might think that these decisions are driven completely by security alliances but Bunte shows through the combination of rich and detailed country narratives and original new data on international lending that distributional domestic politics play an incredibly important role. Who a country borrows from advantages different groups in society and thus the relative influence of those groups on lending choices is decisive in accounting for variation across countries and time. The book is a terrific analysis of a new and important phenomenon in the global economy. - Kenneth Scheve, Freeman Spogli Institute for International Studies, Stanford University Bunte's path-breaking book will reshape the way that scholars think about the choices the governments have when seeking international finance. The book provides an analytical framework to think about why some governments turn to China and other BRICS lenders as opposed to private capital markets, institutions such as the IMF and World Bank, or traditional foreign aid donors like the United States. Bunte argues that domestic politics drive the choices that governments make when seeking international financial support. The book will thus be of interest for scholars of international political economy, and it has implications for security studies of emerging market powers. Because the book's argument relies heavily on domestic politics, it will also be important for scholars of comparative politics. In short, the book is a must-read for political scientists. -James Raymond Vreeland, Professor of Politics and International Affairs, Princeton University

Author Information

Jonas B. Bunte is Assistant Professor of Political Economy at the University of Texas at Dallas. He studies the politics of finance and development. His work has appeared in the British Journal of Political Science, International Studies Quarterly, Journal of Peace Research, World Development, Review of International Political Economy, and elsewhere. He received his PhD in Political Science from the University of Minnesota.

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