To Spend or Not To Spend: Globalization and Latin American Elections.

This paper develops a theory of the political calculus behind macroeconomic policymaking in a financially globalized world. It seeks to explain a fascinating puzzle: why has much of Latin America's left maintained a commitment to macroeconomic orthodoxy? Employing elections as my unit of analysis, I challenge the conventional claim the chief executives engineer an economic boom to win elections. Rather, I argue that in a financially globalized world, politicians face greater policymaking constraints that stem from their exposure to international debt markets and an increasingly sophisticated electorate. They often prefer to use macroeconomic discipline to signal their competence to both investors and the electorate, particularly in light of past hyperinflation and debt crises. Ironically, politicians who presumably face fewer institutional checks and balances, constrain their own executive power to demonstrate macroeconomic policy accountability. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]