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"Financial Globalization and Domestic Policy Autonomy in Latin America" published on by Oxford University Press.

When it comes to analyses of financial power in Latin America, there has been a tendency to assume it is mostly external, relatively homogeneous, and usually constraining of domestic policy autonomy. Increasingly, however, when speaking of financial power in the region, a focus exclusively on foreign capital misses a significant part of the empirical landscape, one inhabited by large domestic institutional investors: public and private pension funds. A focus on these funds reveals that a neat state–finance dichotomy is often unrepresentative of the type of blurred web of interests, influence and ownership that characterizes even those economies that have embraced a significant degree of liberalization. In fact, pension finance is far from uniform across countries. In order to capture this diversity in Latin America, a new typology is suggested that departs from the Anglo-American notion of 'pension fund capitalism' and further specifies pension finance as also revealing dynamics best described as 'pension fund developmentalism and statism'. The typology is not only aimed at capturing more empirical nuance in Latin America; it can also serve as reference for cross-regional analyses of these often neglected, but increasingly powerful financial actors in emerging economies.

"Sovereign Debt Default" published on by Oxford University Press.

AbstractEstablished with the reform of 1993, Argentina's private pension funds became crucial sources of credit for the national government. They purchased large amounts of sovereign bonds defaulted on in 2001 and hence were key to the success of the debt restructuring of 2005. The private pillar was always vulnerable to political maneuvering; the nationalization of private pension funds in 2008 was only the last stage in an iterated process of state intervention, a function of public debt dynamics. This article argues that the financial pressures associated with Argentina's sovereign debt burden systematically shortened the temporality of pension policy decisions, taking those away from long-term concerns about the stability of the social security system and toward the immediacy of debt-financing imperatives. Therefore, the politics of pension reform reversal in Argentina were determined by the increasingly strong and inextricable link between debt and pensions.

The current global credit crisis is unfolding in a context in which new dynamics in the engagement of the public sector and the market are taking shape. This article explores some of these dynamics, especially the reemergence of (re)nationalization initiatives, as well as the growing use of private methodologies for asset management on the part of some governments, which behave as both financial market players and domestic economic stabilizers. Hence, the article discusses the return of the state as a traditional "public leviathan" involved in financial regulation, as well as the work of sovereign wealth funds. The author concludes that at the heart of capitalism's endurance lies this diversity of public responses, which ultimately reveal governments' adaptable agendas and heterogeneous tasks.
I think that capitalism, wisely managed, can probably be made more efficient for attaining economic ends than any alternative system yet in sight, but that in itself it is in many ways extremely objectionable. Our problem is to work out a social organisation which shall be as efficient as possible without offending our notions of a satisfactory way of life. —John Maynard Keynes, The End of Laissez‐Faire, 1926 The all‐powerful market which is always right is finished.…We have to have a new balance between the state and the market. —French president Nicolas Sarkozy, 2008