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China’s overseas financing is a distinct form of “patient capital” that marshals the country’s vast domestic resources to create commercial opportunities internationally. Its long-term risk tolerance and lack of policy conditionality has allowed developing economies to sidestep the fiscal austerity tendencies of Western markets and multilaterals. Globalizing Patient Capital examines China's state-led capitalism, and the costs and benefits of state versus market approaches to development. The book explores how patient capital affects national-level governance across the Americas and beyond, including the potential pitfalls of debt and dependency


Sample Chapter

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Reviewed by the Journal of East Asian Studies in January 2023; Foreign Affairs in December 2022; the Perspectives on Politics in June 2022; Bloomberg News featured the book in a Q&A.

"Drawing on his academic expertise and his practical experience as a researcher at the Federal Reserve Bank of New York, Kaplan presents an in-depth, carefully reasoned assessment of the sudden burst in Chinese lending to Latin American governments." -Richard Feinberg, Foreign Affairs, Nov./Dec. 2022.

"Globalizing Patient Capital is a rich resource for scholars and policy makers who are interested in how China is reshaping the financial landscape in Latin America and the developing world in general and how Chinese loan recipients are also learning how to negotiate with China as a creditor." - Victoria Chonn Ching, University of Southern California. See book review essay, Perspectives on Politics, 20(2): 2022.




"China Faces a 'Creditor Trap' in Lending to Latin America: Q & A" with Tom Hancock, Senior Reporter on China's Economy, Feb. 22, 2022. 

Selected by Professor Paul Poast (@ProfPaulPoast) as the International Relations book of the week in summer 2021!

  • June 4 IR Book of the Week

Book Endorsements

“The best treatment of the political economy of China-Latin America finance to date. Kaplan shows how China’s ‘patient’ capital in Latin America may have the potential to support the region’s long-term development goals—in contrast with the volatile and conditional finance from the West. Kaplan shows that Latin American countries and China alike are climbing a learning curve to  maximize the benefits and minimize the risks associated with their burgeoning economic relationship, while the United States sits puzzled and increasingly alarmed.”

-Kevin Gallagher, Boston University

“A valuable contribution to the burgeoning literature on China and Latin America. Kaplan argues that Chinese finance has a long-term approach and greater risk tolerance than Western capital. This enables Latin American governments to pursue their preferred development policies while avoiding the damaging cycles that have typified in the region. Both scholars and policymakers will benefit from reading the book.”

- Barbara Stallings, Brown University

“A must read for understanding the shifting role of China’s international investment. Kaplan provides the most convincing and nuanced analysis for understanding the evolution of China-Latin American interconnections and their potential trajectory as part of a larger Chinese strategy of international influence. This impressive book is crucial for scholars of both Latin American politics and international political economy. It will reshape our understanding of Latin American political economy and Chinese soft international power.”

- Maria Victoria Murillo, Columbia University

“Kaplan employs new loan data and hundreds of interviews to understand the costs and benefits of Chinese credit. His analysis suggests that Chinese policy banks’ longer time horizons and looser regulatory structures free borrowing governments from fiscal constraints and policy conditions. In exchange, borrowing governments offer a range of commercial concessions to their Chinese creditors, while also risking unsustainable debt burdens. This book offers important insights for anyone interested in the contemporary sovereign financing landscape.”

- Layna Mosley, Princeton University

Click here for more endorsements! 


To what extent are markets and democracy are compatible in an age of financial globalization? For developing countries, the dramatic internationalization of financial markets over the last several decades deepens tensions between politics and markets. Notwithstanding the periodic rise of left-leaning governments in regions like Latin America, macroeconomic policies often have a neoliberal appearance, particularly during troubled times. 


When is austerity imposed externally and when is it a domestic political choice? By combining statistical tests with extensive field research across Latin America, this book examines the effect of financial globalization on economic policy making. Globalization and Austerity Politics contends that a country’s structural composition of international borrowing and its individual technocratic understanding of past economic crises combine to produce dramatically different outcomes in national policy choices. Incorporating these factors into an electoral politics framework, the book then challenges the conventional wisdom that political business cycles are prevalent in newly democratizing regions. This book is accessible to a broad audience and scholars with an interest in the political economy of finance, development and democracy, and Latin American politics. 

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For sample chapters: Chapter 1 and Chapter 2

"Stephen Kaplan beautifully captures how, on the heels of the 1989 Brady Plan for debt restructuring, the quick and simultaneous liberalization of trade and finance in the early 1990s prompted the flow of capital into regional stock and bond markets. This securitization of capital inflows, exciting as it was, also set the stage for massive capital outflows when political and/or economic trends signaled instability. This particularly scenario was one of several causes of the massive exchange rate and banking crises that erupted in Mexico (1994), Brazil (1999), and Argentina (2002). Once the currency hits the proverbial fan and inflation inevitably flares, the menu of options usually boils down to some form of austerity.” 

– Carol Wise, University of Southern California

See book review essay, Slippery Slopes: Globalization, Market Reforms, and Austerity Politics. Latin American Research Review, 52(5):2017.


“Today’s integrated capital markets provide great opportunities for, and impose tight constraints on, governments in the developing world. Just how great are the opportunities, and how tight the constraints, is the topic of much scholarly and popular debate. In Globalization and Austerity Politics in Latin America, Stephen Kaplan provides a careful analysis of how and why Latin American governments have responded to the contemporary international economic environment. He shows, with both cross-national statistical analysis and careful case studies, that governments respond to both international financial and domestic political pressures. Globalization can constrain national policies, but it does so within a domestic political context. This is a careful, thoughtful study that will be of great interest to scholars and students of Latin America, and of the political economy of development more generally.”

– Jeffry Frieden, Harvard University


"Why have governments on the left in Latin American adopted surprisingly conservative macroeconomic policies? Kaplan offers a sophisticated explanation of when and why we have seen this shift.  By focusing on the internal political dynamics of financial market actors, he makes a convincing--yet nuanced--argument about the power of bond markets to shape government policies in a globalized world." 

– Kathleen McNamara, Georgetown University


“In an era of financial openness, some developing countries enjoy more autonomy vis-à-vis capital markets than others. Why? Stephen Kaplan convincingly suggests that the ways in which governments finance their debt and the ways in which political elites view their country’s economic history both play a role. In nations that have experienced inflationary crises and that borrow via bonds (rather than from banks), conditions are ripe for a ‘political austerity cycle.’ Kaplan’s analysis points to the importance of both ideational and material factors, and of both domestic and international forces, on elites’ behavior in contemporary Latin America.”

– Layna Mosley, University of North Carolina at Chapel Hill


“In this deeply insightful and original book, Stephen Kaplan not only offers a fresh interpretation of how global financial markets constrain domestic policymakers in developing countries, but he explains the conditions under which these constraints are more or less confining. Through cross-national statistical tests and comparative case studies from Latin America, Kaplan demonstrates how inflationary experiences and the shift from bank lending to bond market financing shape democratic business cycles, producing austerity measures or stimulus policies. This is a first-rate contribution to the study of the political economy of democracy and development, and it breaks new ground in understanding how domestic policy choices are conditioned by international financial dependence.”

– Kenneth M. Roberts, Cornell University


“Kaplan's book represents a pathbreaking study in international political economy. His work challenges the conventional wisdom about how governments use economic policy before elections. For many decades, scholars have debated whether governments engage in inflationary policies to spur economic growth as they head toward elections, in the hope of retaining power. Kaplan turns this debate on its head, showing that some governments actually apply the financial "brakes" before an election, implementing policies that are anti-inflationary. He grounds his explanation in international and domestic factors. At the international level, some governments that operate in a financially globalized world cannot obtain sufficient access to capital. At the domestic level, some governments face inflation-averse electorates, who seek protection from income shocks and take unsustainable stimulus policies before an election as a bad sign. The book is a must-read for students and scholars of political economy.”

– James Vreeland, Georgetown University

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