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Palgrave Macmillan

Credit Ratings and Sovereign Debt

The Political Economy of Creditworthiness through Risk and Uncertainty

ISBN 9781137302762
Publication Date June 2014
Formats Hardcover Ebook (PDF) Ebook (EPUB) 
Publisher Palgrave Macmillan
Series International Political Economy Series

At the heart of the struggle to constitute the 'politics of limits' – the parameters defining the budgetary realities facing governments – is the growing antagonistic relationship between the imperatives of private (financial) markets and public democracies. Through a new analytical instrumentality, this interdisciplinary account problematizes credit ratings and the problem of sovereign debt to show how the authoritative knowledge underpinning the political economy of creditworthiness is constructed through the deployment of the discursive practices of risk and uncertainty. Unpacking the 'black-box' of sovereign ratings, as a socio-technical device of control and governmentality, we better understand how their authoritative capacity/utility are constituted through their performative effects, which create the conditions and subjectivities that serve to validate and regenerate a disinflationary fiscal normality/rectitude. Political judgment is censured through depoliticizing risk techniques; as a (fallacious) analytics of ratings helps elevate quantitative expertise and relegates competing, qualitative approaches in the design of a neoliberal politics of limits. This exacerbates the asymmetry between epistocracy and democracy, which prompts attempts to reclaim lost fiscal sovereignty.

Bartholomew Paudyn researches government through risk/uncertainty in the IPE of financial/fiscal relations.He teaches IPE at the London School of Economics & Political Science and is a former visiting fellow at the University of Warwick, UK and a postdoctoral fellow at the University of Victoria, Canada. He has published in journals such as the Review of International Political Economy and Review of International Studies.

Introduction: Credit Rating Crisis
New Analytics of Sovereign Ratings
Socio-Technical Devices of Control
Government through Risk and Uncertainty
Performative Political Economy of Creditworthiness

1. Crisis and Control
Emerging Sovereign Bond Markets
Asian Flu Hits Ratings
The Quest for Fiscal Transparency
New Century but Even More of the Old
Contagion Risk of Ratings
Rating Legacy Lingers On
Conceptual Territory of Sovereign Creditworthiness
Authoritative Knowledge
Beyond Just Ideational Constructs
Politics of Resistance and Resilience
Absence of a Singular and Totalizing Neoliberal Capitalism
Absence of Singular Centre to Democratic Resistance/Resilience

2. The Rise of Risk and Uncertainty
Conceptual Lineage of Risk
Period of Hegemonic Risk Financialization
Market Risk
Operational Risk
Credit Risk
Credit Rating Methodologies
Methodologies, Models and Assumptions
Sovereign Rating Analysis
Secretive and Opaque
Modalities of Government

3. Rating Performativity
Performativity Terrain
Illocutionary and Perlocutionary Performativity
Self-Generative Effects for Credit Rating Agencies
Conditionality, Reactivity and Interactivity of Risk (and Uncertainty)
Contagion Amplified Self-Generation
Procyclical Reinforcement
Constitutive Effects for Investors
Mainstream Functionalist Explanations
The Naturalization of Speculators
Prohibitive Effects for Governments
Potential Performativity Breakdown

4. Epistocracy versus Democracy
Credit Ratings and the European Project
Regulating the Ratings Space

5. Problematizing the Ratings Space
Repoliticization of Creditworthiness


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