The New Masters of Capital: American Bond Rating Agencies and the
Politics of Creditworthiness. By Timothy J. Sinclair. Ithaca, NY:
Cornell University Press, 2005. 208p. $29.95.
In his book, Timothy J. Sinclair makes a strong theoretical and
empirical contribution to the growing political economy literature on the
increasing influence of nonstate actors. More specifically, he draws upon
a cogent interweaving of rationalist and constructivist approaches to
reveal the various forms of power exercised by American bond raters, such
as Moody's and Standard & Poor's. Moreover, by means of
detailed case studies on the rating of corporations, municipalities, and
national governments, he demonstrates the broad political implications of
rating agency power in terms of both geopolitical and distributive
questions. In both cases, Sinclair's central argument is that
“rating agencies help to construct the context in which
corporations, municipalities, and governments make decisions. Rating
agencies are not, as often supposed, ‘neutral’ institutions.
Their impact on policy is political first, in terms of the processes
involved, and second, in terms of the consequences of competing social
interests” (p. 149).