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...modities.sThe model also controls for local factors including the Consumer PricesIndex and Central Bank independence, the latter measured by the length ofstenure of each bank’s president or governor (=-=Cukierman, 1992-=-; Cukierman,sWebb, & Neyapti, 1992). The expectation is that longer tenure is perceivedsby investors to mean more independence and therefore should reduce theseffect of elections on uncertainty. Analy...

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...ed as the average age of the top twosgoverning parties and the main opposition parties or a subset of accordingsto the situation in each country, as defined in the Database of PoliticalsInstitutions (=-=Beck, Clarke, groff, Keefer, & Walsh, 2001-=-). This variable issincluded in the model to control for the inchoate characteristics of certainsLatin American party systems, which could weaken the influence of partiessand ideology on economic turb...

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...enerated the greatest risk. Thesnext section relies on process-tracing through within-case analysis to identify when and how policy uncertainty and external vulnerability producedssensations of risk (=-=george & Bennett, 2005-=-, ch. 10). The analysis highlightssresults unexpected by partisan theories such as the increase in the eMBIsduring the 1995 elections in Argentina, the 1998 elections in Brazil, theslack of change in ...

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...ft in the 2002 election in Brazil, in all analyzed elections insVenezuela, and to a lesser extent in 2003 in Argentina and 2006 in Mexico,sconstitutes “crucial cases” in evaluating partisan theories (=-=eckstein, 1975-=-,sp. 118). The other observations produce results unexpected by partisansaccounts—namely, support for Chávez in 2004 coincided with a decreasesin risk; his election in 2006 had little effect, yet the ...

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...07).sMoreover, even if the left-right divide can be assumed to be equivalent inslarge-N studies, the analyst must also understand the meaning in terms ofsthe institutionalization of the party system (=-=Mainwaring, 1999-=-). This article adopts a two-pronged strategy to evaluate the effect of partisanship and the electoral cycle on risk perceptions. First, it includes asspecific variable for party system institutionali...

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...nd much ofsthe international political economy literature seems to argue that globalization weakens the role of domestic politics, making autonomous policysmaking impossible (Cardoso & Faletto, 1979; =-=garrett, 1998-=-; Wallerstein,s2004). Susan Strange (as cited in garrett, 1998) warned that although “states weresonce the masters of markets, now it is markets which, on many crucialsissues, are the masters over the...

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... in a globalized world. Partisan Models Although classical partisan models of political economy emphasize howsthe partisan identity of a government affects economic indicators in developed countries (=-=Alesina, Roubini, & Cohen, 1997-=-; Hibbs, 1977), recentscontributions analyze developing countries and give more attention to thesway that electoral periods affect financial markets as opposed to macroeconomic indicators. Using finan...

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...s the importance of contextual variation—specifically that “in small, open economies, domestic policy makerssmay retain less autonomy over some policies . . . than in larger, less-exposed economies” (=-=Franzese, 2002-=-, p. 371). external constraints on domestic policy making have long been a concern in Latin America, and much ofsthe international political economy literature seems to argue that globalization weaken...

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...ight, becausespartisan identification in Latin America is not always straightforward.4 Thissarticle will label parties following Michael Coppedge’s work on parties andsparty systems in Latin America (=-=Coppedge, 1998-=-).5 Certain adjustmentsswere made because Coppedge identifies parties and winning candidates butsdoes not identify caretaker regimes (see Table 1).6 The impact of Coppedge’s (1998) classification of e...

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...l risk (e.g., Chávez since 1998). Despite these limitations, the eMBI is the benchmark used by bondholders (whose behavior is being studied) and is also used in a number ofspolitical economy studies (=-=Bernard & Leblang, 2006-=-). Moreover, it is thesbest available measure of investor perception of sovereign credit risk and asbaseline indicator of general credit risk. Although risk can be quantified based on probabilistic st...

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...n the re-election of Hugo Chávez in Venezuelashave much of an effect. The most recent literature argues that it is not thesleft per se but a shift to the left that leads to concern among bondholderss(=-=Vaaler, Schrage, & Block, 2006-=-). This would explain the reactions to thesaforementioned elections but not the lack of response to Andrés ManualsLópez Obrador almost winning the presidency in Mexico in 2006. Ansalternative answer m...

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...d lead toward fiscal irresponsibility. In office, Chávez showed policy restraint and even endorsed some conservative macroeconomic policies, while he continued to launch philippicssagainst oligarchs (=-=Buxton, 2003-=-). So in 2000, he was hardly the candidatesfavored by the market, but bondholders had a better idea of how to separate thesrhetoric from the policies. Importantly, the considerable support for the 199...

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...xico in 2006. Ansalternative answer might be that risk was minimal because internationalseconomic conditions were highly favorable to commodity producers andsinternational reserves were considerable (=-=Singh, 2005-=-). But does this explanation hold up over time, particularly during episodes of depressed globalsliquidity and demand for commodities? This article finds that, contrary to much of the political econom...

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...bservations produce results unexpected by partisansaccounts—namely, support for Chávez in 2004 coincided with a decreasesin risk; his election in 2006 had little effect, yet the re-election of Menems(=-=Argentina, 1995-=-) and Cardoso (Brazil, 1998) did. Spanakos, Renno / Sovereign Risk, Ideology, and Presidential electionss5sat PENNSYLVANIA STATE UNIV on September 12, 2016cps.sagepub.comDownloaded fromsThe indicator ...

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...VANIA STATE UNIV on September 12, 2016cps.sagepub.comDownloaded fromsdifferent responses to Latin America’s moderate, institutionalist left; and itssradical, populist, and anti-institutionalist left (=-=Castañeda & Navia, 2007-=-).sMoreover, even if the left-right divide can be assumed to be equivalent inslarge-N studies, the analyst must also understand the meaning in terms ofsthe institutionalization of the party system (Ma...

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...d only when Chávez wassfirst elected in 1998 and a few months after his re-election in 2006? The 1998 elections provided clear evidence that the two-party dominance of the Punto Fijo system was over (=-=Dietz & Myers, 2007-=-). In 1998,sChávez, a former coup leader with no governing experience, was supportedsby a broad but largely uncoordinated base of voters disenchanted with systemic parties and who applauded that he wa...

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...Models Although classical partisan models of political economy emphasize howsthe partisan identity of a government affects economic indicators in developed countries (Alesina, Roubini, & Cohen, 1997; =-=Hibbs, 1977-=-), recentscontributions analyze developing countries and give more attention to thesway that electoral periods affect financial markets as opposed to macroeconomic indicators. Using financial market d...

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... system. What was less predictable was whether Chávez would followsa developmentalist, state-led growth approach to macroeconomic policy orswhether he would move toward socialism, as critics alleged (=-=Lebowitz, 2006-=-).sThe ambiguity of future policies while new rules of the game were being established occurred alongside a recovery in global petroleum prices, whichsimproved the government’s ability to continue to ...

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...btslevels were harder to sustain). One month before the elections, Cardososincreased interest rates to defend the real, while Lula proposed a referendumson whether capital controls should be imposed (=-=Moffett & Fritsch, 1998-=-). Itsis not surprising that despite the vulnerability of the Brazilian market to thesglobal financial malaise, bondholders believed that Cardoso could mores16sComparative Political Studiessat PENNSYL...