
The Perils of International Capital
Type
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.