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Congressional Politics of International Financial Rescues

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  • J. Lawrence Broz

Abstract

In the 1990s, the American executive organized financial rescues for Mexico and several Asian economies. These rescues were controversial in Congress, where members voted repeatedly to reduce or eliminate the executive's freedom to engage in them. I analyze these roll calls with an eye toward explaining who opposes and who supports international financial rescues. I argue that the interests of private actors (district constituencies and interest groups) have an important effect on member voting. Following Stolper‐Samuelson reasoning, I find that a member is significantly more likely to favor (oppose) rescues as the proportion of high‐skilled (low‐skilled) workers in a district increases. In addition, I find that campaign contributions from international banks increase the probability that a member will vote in favor of rescues. Overall, the findings suggest that the distributional effects of rescues find expression in Congress and constrain U.S. international financial policymaking.

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  • J. Lawrence Broz, 2005. "Congressional Politics of International Financial Rescues," American Journal of Political Science, John Wiley & Sons, vol. 49(3), pages 479-496, July.
    • Handle: RePEc:wly:amposc:v:49:y:2005:i:3:p:479-496
    DOI: 10.1111/j.1540-5907.2005.00137.x
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    Cited by:

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    2. Axel Dreher & Jan-Egbert Sturm, 2012. "Do the IMF and the World Bank influence voting in the UN General Assembly?," Public Choice, Springer, vol. 151(1), pages 363-397, April.
    3. ManuelFunke & ChristophTrebesch, 2018. "Financial Crises and the Populist Right," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(04), pages 06-09, January.
    4. Helen V. Milner & Dustin H. Tingley, 2010. "The Political Economy Of U.S. Foreign Aid: American Legislators And The Domestic Politics Of Aid," Economics and Politics, Wiley Blackwell, vol. 22(2), pages 200-232, July.
    5. Beyer, Jürgen, 2024. "Financialization, Democracy, and Society - Ten Years After the Beginning of the Financial Crisis," SocArXiv jks8v, Center for Open Science.
    6. Funke, Manuel & Schularick, Moritz & Trebesch, Christoph, 2016. "Going to extremes: Politics after financial crises, 1870–2014," European Economic Review, Elsevier, vol. 88(C), pages 227-260.
    7. J. Broz, 2008. "Congressional voting on funding the international financial institutions," The Review of International Organizations, Springer, vol. 3(4), pages 351-374, December.
    8. Javier Santiso, 2007. "Latin America's Political Economy of the Possible: Beyond Good Revolutionaries and Free-Marketeers," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262693593, April.
    9. J. Lawrence Broz, 2008. "Congressional voting on funding the international financial institutions," The Review of International Organizations, Springer, vol. 3(4), pages 351-374, December.
    10. Tingley, Dustin, 2010. "Donors and domestic politics: Political influences on foreign aid effort," The Quarterly Review of Economics and Finance, Elsevier, vol. 50(1), pages 40-49, February.
    11. Bumba Mukherjee & David Andrew Singer, 2010. "International Institutions and Domestic Compensation: The IMF and the Politics of Capital Account Liberalization," American Journal of Political Science, John Wiley & Sons, vol. 54(1), pages 45-60, January.
    12. Lauren L. Ferry & Emilie M. Hafner-Burton & Christina J. Schneider, 2020. "Catch me if you care: International development organizations and national corruption," The Review of International Organizations, Springer, vol. 15(4), pages 767-792, October.
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