Congressional Politics of International Financial Rescues

• Published in: American journal of political science 2005-07, Vol.49 (3), p.479-496
• Main Author: Broz, J. Lawrence
• Format: Article
• Language: English
• Subjects: Banks; Campaign contributions; Congressional voting; Criticism; Debt cancellation; Economic crises; Economic crisis; Economic globalization; Emerging markets; Empirical research; Executive power; Financial crisis; Financial policy; Fiscal Policy; Foreign Aid; Foreign economic policy; Imports; Interest Groups; International banks; International finance; International loans; International trade; Legislators; Policy Making; Political action committees; Public Sector Private Sector Relations; Roll Call; U.S.A; United States of America; Unskilled workers; Voting; Voting Behavior; Workers' participation
• ISSN: 0092-5853; 1540-5907
• DOI: 10.1111/j.1540-5907.2005.00137.x

In the 1990s, the American executive organized financial rescues for Mexico and several Asian economies. These rescues were controversial in Congress, where members voted repeatedly to reduce or eliminate the executive's freedom to engage in them. I analyze these roll calls with an eye toward explaining who opposes and who supports international financial rescues. I argue that the interests of private actors (district constituencies and interest groups) have an important effect on member voting. Following Stolper-Samuelson reasoning, I find that a member is significantly more likely to favor (oppose) rescues as the proportion of high-skilled (low-skilled) workers in a district increases. In addition, I find that campaign contributions from international banks increase the probability that a member will vote in favor of rescues. Overall, the findings suggest that the distributional effects of rescues find expression in Congress and constrain U.S. international financial policymaking.