PUBLICATIONS
Economic Balancing and China-U.S. Financial Ties (forthcoming at Security Studies)
This paper develops the concept of economic balancing, a strategy whereby a state leverages economic policies to surpass a peer competitor. I argue that economic balancing is more likely to take place when a state identifies the economic power of a peer competitor as both an economic and military threat. The identification of a dual threat allows policy-makers to link economic development and international security. This linkage, in turn, allows policy-makers to build coalitions across bureaucracies, coordinate policy interventions, and obtain autonomy from competing domestic interests. Under these conditions, states can carry out the policy and institutional changes in the domestic economy that are necessary to pursue an economic balancing strategy. I demonstrate the argument’s plausibility with in-depth case studies of foreign direct management by China and the United States.
The Politics of Growth Model Switching: Why Latin America Tries, and Fails, to Abandon Commodity-Driven Growth. In Diminishing Returns: The New Politics of Growth and Stagnation. Edited by Mark Blyth, Jonas Pontusson, and Lucio Baccaro. Oxford University Press.
Latin America’s developmental trajectory is largely defined by its states unsuccessful attempts to switch away from a Growth Model (GM) based upon the extraction and exportation of commodities to growth models based on manufacturing and services. Attempts to switch GMs were carried out by populist governments after the Great Depression, by bureaucratic-authoritarian regimes during the Cold War, and by New Left governments during the recent commodity boom. Despite significant variation in ideologies, coalitions, and external conditions, these governments all failed. As a result, no Latin American country has achieved structural transformation, precluding improvements in country income status and contributing to the region’s vast intra-country inequality.
I argue that the persistence of commodity-driven growth in Latin America is explained by an endogenous distributional dilemma. While governments have clear incentives to promote the interests of the rural sector due to its centrality in commodity-led growth, doing so affects their capacity to promote the urban sector, and thereby successfully switch GMs. The dilemma can be observed in three distinct, yet inter-related areas: macroeconomic policies, fiscal policies, and the domestic balance of power. First, commodity-led GMs generate an appreciated exchange rates on the upside of the commodity cycle that leads to negative production and income effects in the urban sector. Second, they produce fixed assets and income concentration, making redistribution particularly difficult. Third, they empower rural elites that oppose the structural transformation of the economy. This chapter shows that once established, commodity-based GMs tend to persist despite their detrimental developmental outcomes.
“Transnational Activist Networks and South-South Finance: Transparency and Environmental Concerns in the Brazilian National Development Bank.” International Studies Quarterly, Volume 61, Issue 4, 1 December 2017, Pages 760–773. With Kathryn Hochstetler
This paper studies how transnational advocacy networks can influence international development finance. Activists shaped the World Bank’s lending by increasing its transparency and limiting its socio-environmental impacts. Developing countries can now look towards rising economic powers’ national development banks to finance their infrastructure and energy projects. Because these banks have weak transparency and socio-environmental standards, this poses a new challenge for transnational activism. Can activists leverage strategies used in World Bank reform to influence national development banks? We argue that whether a target is a supranational or national institution shapes the deployment and effectiveness of activist influence strategies. A supranational mandate and structure facilitates the deployment and effectiveness of a direct strategy focused on the transnational level, targeting the bank itself, and an indirect strategy focused on the national contexts of the bank’s shareholders and borrowers. In contrast, a national mandate and structure encourages the deployment of influence strategies solely in the context of the lending state, and the greater effectiveness of indirect strategies rather than direct strategies. We illustrate our argument by exploiting variation in the success across campaigns of a transnational network created to reform the Brazilian National Development Bank.
“The Domestic Political Conditions for International Economic Expansion: Lessons from Latin American National Oil Companies.” Comparative Political Studies. December 2015 vol. 48 no. 14 2010-2043. With Pauline Jones Luong
The internationalization of emerging country national oil companies (NOCs) is one of the most surprising manifestations of state capitalism’s resurgence at the end of the 20th century. Several prominent Latin American NOCs are part of this trend, including Brazil’s Petrobras, Mexico’s Pemex, and Venezuela’s PdVSA. Yet Latin America is precisely where we should expect NOCs to face the greatest obstacles to internationalization. Existing research emphasizes the role of structural changes at the international level and the inherent advantages of NOCs at the domestic level in creating both a uniform desire and capacity across NOCs to internationalize successfully in the 2000s. Even more puzzling, then, is that these three Latin American NOCs vary considerably in terms of both the timing of internationalization and the degree to which they succeeded. We offer an alternative explanation for this variation that specifies the domestic political conditions under which an NOC had the greatest capacity to internationalize in the 2000s: 1) a consensual mode of emergence in which the nationalization process was carried out amicably; and 2) an early convergence of interests between NOC managers and the government regarding the merits of internationalization. Thus, contra forecasts that the dominance of NOCs in global energy markets is inevitable, our research suggests that international economic expansion is constrained by domestic politics.
UNDER REVIEW
“Globalized State-led Development”
This paper explores the emergence of globalized state-led development, a development strategy whereby governments promote the outward foreign direct investments (FDI) of domestic firms. This focus departs from recent literature on state-led development, largely centered on the constraints on state intervention placed by globalization, or on governments’ efforts to attract inward FDI.
I argue that state support for outward FDI allows states to pursue industrial policy in an open economy and enables firms to obtain greater financial, informational, and technological benefits from investing abroad. I test my argument in the context of Brazil, where the state financed the outward FDI of nationally-controlled firms. I evaluate my argument by combining a difference-in-differences analysis of an original firm-level dataset of large Brazilian multinational corporations with a case study of an information technology firm. The difference-in-differences analysis shows that supported firms outpace non-supported firms in market access (measured by the number of host countries and free trade agreements) and knowledge access (measured by the innovation ecosystems of host countries and research and development activities abroad). The case study illustrates the mechanisms and sequence through which public financing shapes firm internationalization. By studying the role of state financing of MNCs, this paper shows that rather than retreat, state intervention has globalized.
WORK IN PROGRESS
Partners At Home and Abroad: Why States Promote Outward Foreign Direct Investments [Working Paper]
Why do emerging powers support domestic MNCs? A development strategy that promotes the foreign investments of domestic firms is puzzling because it empowers big business, sends large amounts of capital abroad, and is perceived by workers as a threat to their employment. I argue that policymakers in emerging economies adopt policies that support outward foreign direct investments when they hold causal beliefs about the need to retool state-development to a globalized economy. Under these conditions, state-led development continues to support national champion firms, but is no longer inward-looking. This argument challenges existing research in political economy which provides interest group explanations for the liberalization of outward investments. It documents how the ideas of policy-makers in Brazil and China regarding globalization have evolved and prompted policy switches from obstructing outward flows to actively promoting the foreign investments of national firms.
Green Finance: Can Firms Transition Towards Clean Energy Without Government Support? [Data Gathering]
This project examines how governments can provide ‘green finance’ that allows domestic firms to transition towards clean energy. Because private funding continues to be limited for low-carbon technologies, understanding the conditions under which the state can scale-up green capital is key. Building on my prior research on development finance, I hypothesize that government access to domestic and international capital markets shapes the size of a country’s green economy and the types of firms—risk-averse versus risk-taking— that participate in it. This project focuses on green finance policies in four countries— Brazil, Mexico, Germany, and the United States— that vary in terms of the state’s role in the domestic capital markets and in their access to international capital markets. My research design combines case studies of green finance institutions with qualitative and econometric analyses of how different forms of finance influence firms’ decisions.
Jazmin Sierra 