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In this chapter, I highlight the historical prevalence of sovereign default as a potentially devastating form of economic crisis. I also identify that, despite the decision to default being held by politicians or politically-appointed actors, our understanding of the political dynamics surrounding default is limited. I conclude by summarizing my regime-contingent argument on the political economy of default.
While earlier chapters have compared urban or rural biases across different countries, in this chapter I make use of a rare confluence of historical conditions in the Turkish case, in which an identical ruler---Turgut Ozal---presided over agricultural price policies under autocratic and democratic institutions. While serving as minister of finance under military rule, Ozal was a fierce critic of costly agricultural support programs that had developed under prior electoral competition between Turkish parties, and successfully removed many of these farm support programs. However, when competing for office following restoration of multiparty elections, Ozal discovered the necessity of winning rural support for electoral success, and subsequently reinstated costly farm subsidies. The Turkish case helps validate the broader expectations of urban or rural bias, within the same country, across differing institions of executive survival, and also demonstrates that the inability of elected leaders to remove costly subsidies was a key factor driving Turkey to default on its sovereign debt.
In concluding the book, while noting that the political salience of food prices may be lessened in the developed world, I also highlight the applicability of my theory of sovereign default to a wider set of issue areas than just food price policy, including politically-sensitive areas such as oil pricing policy as well as costly "entitlement" programs such as Social Security and Medicare. In addition,
This chapter develops my theory of regime-contingent sovereign default by focusing on two strategies of mass politics: voting and revolt. I argue that partitioning citizens into urban versus rural agents aligns closely with traditional accounts of groups with advantages in these two strategies: specifically, urban citizens are generally considered to enjoy advantages for protest activity, whereas rural citizens have frequently been identified as crucial swing voters. After noting that these groups differ in their preferences for food price policy, I link the pressure from urban revolt to sovereign default in autocracies, particularly those that import a great deal of food. Conversely, rural electoral pressure often leads to large farm price supports which can be difficult to remove during fiscal crisis, suggesting that more rural democracies (especially those that export a great deal of costly food) should be more likely to default. The chapter concludes by also considering variation within regimes: electoral autocracies are argued to dilute the sole focus of autocrats on urban areas, whereas contentious democracies should lead to reduced emphasis on rural voters.
This chapter begins with the case of Zambia under the rule of Kenneth Kaunda, a regime that became increasingly centered on urban consumers as a crucial base of support. As expected by my theory of urban bias in closed autocracies, the Zambian regime pursued a number of cheap food policies, particularly for maize, the staple crop. Yet, as the fiscal costs of these programs began to mount, the government repeatedly proved unwilling to remove such food subsidies, even under increasing pressure from the IMF, culminating in default on Zambia's debt after a major protest triggered by attempts to limit food subsidies. Yet, this over-riding concern for urban consumers is contrasted against the strong state support for rural agriculturalists in the Malaysian case, where the dominant UMNO regime relied on turnout of rural supermajorities to maintain rule in a system of electoral autocracy. While still sensitive to urban costs of living, at no point did Malaysian policy become overwhelmingly biased towards one geographic area; when faced with fiscal crisis in the 1980s, this also eased the ability of the government to reform a series of burdensome state programs and avoid default.
This chapter provides support for my main hypotheses that more urban and food-importing autocracies should be more likely to default, whereas more rural and food-exporting democracies should be more likely to renege on their international financial obligations. Drawing on approximately 50 years of cross-national data, I demonstrate robust evidence in favor of my main theoretical expectations, which remain even after introducing an extensive battery of controls for additional country- and systemic-level alternative explanations. In addition, I show that, for the subset of countries with relevant data on subsidy costs, it is precisely the most rural-biased democracies, and most urban-biased autocracies, that are most likely to default on their debt.
I begin this chapter with a case study of Costa Rica, a country almost universally admired for its peaceful and democratic political system. In such a consolidated democracy, I demonstrate that political attention to rural voters played a crucial role in the electoral success of the dominant PLN party; however, when faced with fiscal crisis in the 1980s, inability to reform agricultural pricing policies (as well as wage policies for electorally-crucial public sector unions) ultimately drove Costa Rica into default. The chapter concludes with discussion of contentious democratic politics in Jamaica, where political violence often organized by parties in urban centers unfortunately often plays a role. In such a system, the importance of limiting urban unrest through cheap food policies became a clear target under both PNP and JLP rule. Under severe fiscal crisis in the 1980s, Jamaican rulers proved unwilling to reform pricing policies beneficial to urban interests out of fear of societal unrest that would result, driving Jamaica to default not only to its external creditors, but also on its loans from the IMF itself.
We implemented universal SARS-CoV-2 testing of patients undergoing surgical procedures as a means to conserve personal protective equipment (PPE). The rate of asymptomatic SARS-CoV-2 infection was <0.5%, and suggests that early local public health interventions were successful. While our protocol was resource-intensive, it prevented exposures to healthcare team members.
The International Monetary Fund (IMF) predicts that, in the coming years, more than fifty countries are at risk of default. Yet we understand little about the political determinants of this decision to renege on promises to international creditors. This book develops and tests a unified theory of how domestic politics explains sovereign default across dictatorships and democracies. Professor Ballard-Rosa argues that both democratic and autocratic governments will choose to default when it is necessary for political survival; however, regime type has a significant impact on what specific kinds of threats leaders face. While dictatorships are concerned with avoiding urban riots, democratic governments are concerned with losing elections, in particular the support of rural voting blocs. Using cross-national data and historical case studies, Ballard-Rosa shows that leaders under each regime type are more likely to default when doing so allows them to keep funding costly policies supporting critical bases of support.