Pursuing Credit: Sovereign Debtors’ Economic and Political Motivations to Oscillate in Creditor Selection
Abstract/Contents
- Abstract
- In a decade and a half, three Presidential administrations in the Republic of Ecuador have led the country to oscillate three times in its selection of sovereign and private creditors. Beginning in 2007 with the election of President Rafael Correa, Ecuador foreclosed any possibility of borrowing from Western multilaterals and bond markets following a puzzling decision to default on bonds. Over the next ten years, Ecuador became one of the 30-most indebted countries to the People’s Republic of China. Then, when Correa’s successor President Lenín Moreno was elected in 2017, a process many described as a parricide marked a re-embrace of multilaterals, though the administration also continued to borrow heavily from China. Finally, in 2021, President Guillermo Lasso aligned himself, and therefore, the country, closer once more with multilaterals, and finally qualified Chinese lending to Ecuador as detrimental to the country’s growth. In this thesis, I seek to determine what a country’s guiding and principal motivations are when choosing with which creditor to engage. I examine each of these three Presidential administrations as distinct time periods in Ecuador’s history of sovereign borrowing, and seek to answer the aforementioned question through interviews with seven high-ranking officials in the Ecuadorian government or regional and international multilaterals. I also leverage qualitative analysis of public declarations, government decrees, and contracts. I find that, broadly, incentives to oscillate between creditors can be split into economic and political motivations. Each of these in turn can be subdivided further into considerations. These are availability of capital, cost of capital, ideological affinity, geopolitical considerations, and political and electoral benefits. I concluded that while these considerations vary in importance from one administration to the next, availability of capital and ideological affinity were central across all three administrations. I also highlight how creditor selection can be used to garner political and electoral benefits, particularly through the use of signaling mechanisms for voters. This is an element that escapes the literature and is a new contribution to the field.
Description
| Type of resource | text |
|---|---|
| Date modified | December 5, 2022 |
| Publication date | August 15, 2022; May 27, 2022 |
Creators/Contributors
| Author | Baus Dávalos, José María |
https://orcid.org/0000-0002-9339-5624
(unverified)
|
|---|
Subjects
| Subject | Sovereign debt; sovereign debt default; Ecuador |
|---|---|
| Genre | Text |
| Genre | Thesis |
Bibliographic information
Access conditions
- Use and reproduction
- User agrees that, where applicable, content will not be used to identify or to otherwise infringe the privacy or confidentiality rights of individuals. Content distributed via the Stanford Digital Repository may be subject to additional license and use restrictions applied by the depositor.
- License
- This work is licensed under a Creative Commons Attribution 4.0 International license (CC BY).
Preferred citation
- Preferred citation
- Baus Dávalos, José María. (2022). Pursuing Credit: Sovereign Debtors’ Economic and Political Motivations to Oscillate in Creditor Selection. Stanford Digital Repository. Available at https://purl.stanford.edu/gt472hv1196
Collection
Stanford University, Fisher Family Honors Program in Democracy, Development, and the Rule of Law. (CDDRL)
View other items in this collection in SearchWorksContact information
- Contact
- josemariabaus1@hotmail.com
Also listed in
Loading usage metrics...