Capital Preferences: International Capital and Government Partisanship

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Date: Dec. 2015
From: International Studies Quarterly(Vol. 59, Issue 4)
Publisher: Wiley Subscription Services, Inc.
Document Type: Report
Length: 181 words

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Abstract :

Byline: Andrey Tomashevskiy Many argue that government partisanship influences the size of investment flows into stocks and bonds. But existing literature tells us little about how international capital flows influence election outcomes. I argue that passive investment into stocks, bonds, and other debt instruments-in other words, portfolio investments-increases political contributions to right-wing parties. This investment generates resources for domestic capitalists. These owners of capital then channel these resources into political contributions to right-wing parties and enhance those parties' electoral position. Thus, passive investment bolsters the electoral chances of right-wing governments. I illustrate this process with a formal model of special interest politics in which lobbies operate under budget constraint. Using a new data set on political contributions and statistical analyses for a sample of states from 1980-2009, I find support for my general argument. Article Note: I would like to thank Christine Cahill for reading previous drafts of this paper and for continued support. I would also like to thank Daniel Kono and two anonymous reviewers for valuable comments. I am grateful to Kevin Cruz and Laurel Sudduth for research assistance.

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Gale Document Number: GALE|A439973076