Rating Politics

Zsofia Barta and Alison Johnston have written the best book to date on the political economy of sovereign credit ratings. In Rating Politics, Barta and Johnston demonstrate that the often unintuitive logic of how rating agencies assess the credit worthiness of sovereigns creates constraints on policies, despite the fact that the agencies do not assess governments directly through lenses of either politics of policies. The role of rating agencies in sovereign credit markets is influential and at the same time poorly understood. Employing every possible methodological tool to make sense of the practices and effects of rating agencies, Barta and Johnston have made a significant, enduring contribution to our understanding of how the world economy functions. * Rawi Abdelai, Harvard Business School * Rating Politics examines an important actor in global finance-credit ratings agencies. Although these agencies are private actors, they perform governance functions via their assessment of sovereigns' policies and political institutions. Barta and Johnston focus on how the logic of the ratings industry, and especially agencies' concern about their reputations, affects their assessments of governments. Focusing on wealthy democracies, the book uses interviews, rating agency reports, and statistical analyses to detail the ways in which rating agency practices affect the cost of sovereign finance. This book will be of interest to those who study sovereign finance, the governance of international capital markets, and the interaction between national welfare state policies and the global economy. * Layna Mosley, Princeton University *