ABSTRACT
Latin American debt has been politicized since the financial crisis began in 1982. It is easy to understand why international debt has become an international political issue, for the renegotiation of cross-border loans inevitably involves governments. This chapter summarizes the domestic political impact of the debt crisis in the five largest Latin American debtor nations: Argentina, Brazil, Chile, Mexico, and Venezuela. It shows how the domestic distributional effects of the financial crisis have been reflected in the domestic political arenas of the major Latin American debtors. The chapter discusses the distributional effects during the borrowing process and the financial crisis, respectively. It explores the political implications of these distributional effects during the debt crisis. Foreign debt is often a source of domestic political conflict, for it can raise important distributional issues. To explain the structure of domestic political activity in the debt crisis, the chapter provides an analysis of the different effects on various economic sectors.
