5 - Chinese Financing and Latin American Fiscal Space

Summary

Chapter 5 conducts a comparative case study analysis across ten presidential administrations in six countries (Argentina, Bolivia, Costa Rica, Ecuador, Jamaica, and Venezuela) using national-level government policies as the unit of analysis. By varying exposure to Chinese state-to-state ?nancing over time, it compares periods of large-scale Chinese bilateral ?nancing to periods of extensive multilateral ?nancing (i.e. where countries have IMF and World Bank programs). Chapter 5 finds that governments that directly contract Chinese financing bilaterally are more likely to use these credit lines to cover budgetary shortfalls in exchange for future oil delivery or nontendered concessions to Chinese ?rms and machinery suppliers. Notably, it also finds that extensive Chinese state-to-state financing frameworks that replace public procurement laws, such as those used in Ecuador and Venezuela, are more likely to yield expansive fiscal expansions than project-level financing that is legally exempt fromexisting public procurement frameworks.