The Perils of International Capital

Publication Year
2020

Type

Book
Abstract

Can foreign capital empower dictatorships? In this book, I offer a unified theory of the impact of three prominent types of international capital – foreign aid to governments, migrant remittances to households, and foreign direct investment to firms – on the survival of dictatorships. Existing scholarship that examines different types of international capital in isolation misestimates their effects. The book’s unified theoretical approach clarifies the channels through which a strategically oriented government can leverage each type of capital flow to finance two important instruments of nondemocratic politics: repression and patronage. The book’s methodological approach takes seriously questions of causal identification, exploiting plausibly exogenous variation in capital flows to more precisely estimate their effects. In doing so, I introduce creative ways to turn the observable world into a quasi-experimental laboratory. The book’s theory, case studies, and cross-national statistical evidence demonstrate how international capital can foster authoritarian politics. These findings challenge many existing studies and contribute to several important literatures in economics and political science.

Publisher
Cambridge University Press