ABSTRACT
This introduction presents an overview of the key concepts covered in the subsequent chapters of this book. The book examines the "brand name" effect of government partisanship on market perceptions – that is, how a party's label affects markets' perception of the party when other important economic and political conditions are taken into consideration. It focuses on formal institutions and their utility as an important signal in international financial markets. The book considers the idea of the Nixon hypothesis to explain the market behaviors. It discusses the markets' perceptions of left-wing governments in developing countries. The book also discusses the credibility-building effects of democratic institutions. It describes how the level of political constraints affects investor confidence, and whether such signaling effects depend on government partisanship. The book also examines the effects of international institutions and government partisanship on sovereign credibility.
