Credit Rating Agencies as Policymakers: The Different Stances Regarding Core and Peripheral Countries During the Pandemic

ARTICLE

Bruno De Conti, Pietro Borsari, Manuel Martínez Mantilla | BRICS Journal of International Relations and Development

Even during a devastating crisis such as the one provoked by COVID-19, peripheral countries faced significant constraints in implementing policies aimed at curbing the disaster. In the context of financialization, decisive constraints arise from the protagonist role assumed by the Credit Rating Agencies (CRAs). Contributing to the debates on the lack of policy space in peripheral countries, this article aims to investigate the evaluation of the anti-cyclical policies in core and peripheral countries carried out by the CRAs during the pandemic, and the impacts on the policy space of the respective countries. The study hypothesises that the CRAs adopt different stances towards core and peripheral countries. The research methodology involved qualitative content analysis of 58 reports published by three important CRAs, which indicate a differentiated treatment of core and peripheral economies regarding tolerance for public indebtedness and fiscal policy management, exerting strong pressure against countercyclical policies in peripheral countries. The conclusion is that, in the context of subordinate financialization, CRAs became important policymakers, which is not only a decisive obstacle for the possibilities of socioeconomic development in peripheral countries, but also a fundamental contradiction with the most basic elements of democracy.

Full article: https://doi.org/10.70346/bjird.v1i1.032