Banker to the Third World: U. S. Portfolio Investment in Latin America, 1900-1986 (Volume 18) (Studies in International Political Economy)

By the end of 1985, Latin Americans owed their foreign creditors $368 billion. That was nearly $1,000 for every man, woman, and child between the Rio Grande and Tierra del Fuego. The debt represented more than half of the region's gross domestic product, and interest payments alone consumed 36 percent of export revenues. If profits are added to interest, and the total compared to new capital inflows, the drama of the situation becomes clear: a real resource transfer from Latin American was under way. More than three-fourths of Latin America's debt was owed to several hundred commercial banks with headquarters in North America, Europe, and Japan. Banker to the Third World examines why the loans that precipitated the 1985 debt crisis were made, how these loans were similar to, and different from, other loans, what solutions to the crisis would be effective, and how such problems could be avoided in the future. When originally published, this title presented a new and timely analysis of the crisis; today it serves as a historical exploration that will give readers a better understanding of both Latin American economic history and more recent foreign debt crises. This title is part of UC Press's Voices Revived program, which commemorates University of California Press’s mission to seek out and cultivate the brightest minds and give them voice, reach, and impact. Drawing on a backlist dating to 1893, Voices Revived makes high-quality, peer-reviewed scholarship accessible once again using print-on-demand technology. This title was originally published in 1987. Cover Series Editors Title Page Copyright Contents List of Tables List of Figures Acknowledgments Introduction Chapter One. Theories of Capital Export: Lessons from the British Experience Conceptualizing Capital Export Literature on British Capital Export Nineteenth-Century Britain Versus Twentieth-Century United States Modification of Hypotheses Chapter Two. U.S.-Latin American Financial Relations: A Historical Overview The Transition Period in International Finance: 1897-1919 The First Lending Boom: 1920-30 Default and the Private Bank Retreat: 1931-54 Nonbank Capital Flows: 1955-69 The Second Lending Boom: 1970-80 Epilogue: The 1980s Conclusions Chapter Three. Characteristics of U.S. Portfolio Investment in Latin America Notes on the Data Periodization of Portfolio Investment Comparisons with Other Types of lnvestment Characteristics of Portfolio Investment Conclusions Chapter Four. Long-Term Trends in U.S. Portfolio Investment Supply Factors: Characteristics of the U.S. Economy Demand Factors: Characteristics of Latin American Economies Conclusions Chapter Five. Short-Term Fluctuations in U.S. Portfolio Investment Links Between U.S. and Latin American Economies The 1920s The 1970s Conclusions Chapter Six. The Lending Process: A Case Study of Peru The Beginning of U.S. Domination in Peru The First Loan Cycle: The Leguia Government, 1919-30 Retreat of the Banks: 1931-68 The Second Lending Cycle: The Military Government, 1968-78 Epilogue: A New Lending Cycle Conclusions Chapter Seven. The Future in Historical Perspective U.S. Lending in the 1920s and 1970s U.S. Lending and Theories of Capital Export The Financial Crisis of the 1980s Appendixes. Statistical Data, Sources, and Methodology I. Capital Flow Series II. U.S. Economic Series III. Latin American Regional Economic Series IV. Latin American Country Economic Series V. Data Bank on International Loans Bibliography Index