In this paper we test the impact of elections on fiscal policy in Latin American economies in comparison to OECD countries over the period 1990-2006. We find that in Latin American countries, the average primary balance declines by an amount close to 0.7 per cent of GDP during an election year,...

The paper addresses two core questions: do investment banks’ recommendations have an impact on the allocation of portfolio flows in the emerging-markets asset class? Above all, are these recommendations related to the business of investment banks? In order to answer these questions, we...

Les recommandations des banques d’investissement concernant les emprunts publics des pays émergents tendent à devenir particulièrement défavorables à l’approche d’une élection. Cette aversion est en fait davantage liée à l’incertitude que génère l’évènement qu’à la...

Les emprunts obligataires ont supplanté les emprunts bancaires et autres sources de capitaux tels que l’aide au développement, par exemple, comme première source de financement pour les marchés émergents.

Are the financial markets politically correct? In other words, do they have preferences when it comes to political regimes or partisans? This issue has often been explored with regard to foreign direct investment (FDI) or public development aid, but rarely in relation to portfolio flows in...

Bond financing has replaced bank loans and other sources of capital flows as a major source of funding for emerging markets. This shift has been particularly impressive in Latin America. Disentangling the dynamics of emerging bond markets and the information flow about them has attracted the...

This paper contributes to literature on the process of reform in Latin America. We study political economy aspects and the policy making process of reforms in what we identify as the five critical steps through the "life cycle" of a policy reform: the Planning, Dialogue, Adoption,...

This paper studies the interaction between different actors in the policy-making process of fiscal transfer reform in Colombia. To analyse this reform, we use the “life cycle of reform” framework. In that context, we follow critical phases in the reform process: planning, dialogue and...

This paper studies sovereign debt crises during the period 1993-2006 through the prism of the primary sovereign bond market. Two conclusions emerge. First, investment banks price sovereign default risk well before crises occur and before investors detect default risk. Between three and one years...