Governing Private Debt: the political economy of regulating credit markets in the Global South (PRIDEBT)

Grant number: PID2023-150332NB-I00

This project explores how the broader changes in the global economic system with the growing dominance of financial markets in political decision-making have enabled the deepening of financial liberalization reforms, which has gradually given rise to private debt regimes in small open economies. Private debt regimes refer to the governance of private borrowing, repayment and collection of loans via laws, rules, regulations and norms. The mechanisms include formal and informal practices that govern these exchanges. At the same time, there is a great deal of variation in how private debt regimes operate across emerging capitalist economies because the integration of national financial markets into the global circuits of capital varies. Some countries are integrated deeply, others more moderately and some are integrated in a more limited manner. Given this backdrop, PRIDEBT compares three small open economies across Latin America, the Middle East and Southeast Asia to explain and conceptualize emerging private debt regimes, with a focus on Argentina, Malaysia and Turkey. All three countries are classified in the upper middle income by the World Bank, yet occupy the lower echelons of global currency hierarchy and have limited projection of global influence in international markets. Since the onset of neoliberal policy reforms in the 1980s, residents in all three countries have experienced a decline in access to public goods provision due to an emphasis on fiscal discipline, prompting them to seek alternative means to access finance. At the same time, there is a strong correlation between how these countries are influenced by the broader changes in the international economic system, such as the growing influence of financial markets, and the national outcomes with respect to how private debt is governed. Based on original data from these three cases, the project explores the sources of variation in the governance of private credit allocation and repayment terms across the periphery of global finance.

▶️ What is PRIDEBT about? Check the promotional short video