This research explores the link between economic resources and political power focusing on how Argentina’s semi-peripheral integration into the global financial system influenced power relations within the country’s ruling coalition between the years 1989 and 2001. The findings are supported by evidence from interviews of decision-makers, the National Public Credit Office database on sovereign debt issues, and a large body of press articles. This ruling coalition during this period comprised political parties in government, granting democratic legitimacy, technocrats from economic liberal think tanks and players with economic resources including local business groups and private actors of the global financial system. Unlike those central countries that make up the “core” of the global system, or periphery countries, which are at the margins or are excluded from this system, Argentina represents a case of a “semi-peripheral” integration. This can be seen in the country’s variable access to external private borrowing which is dependent how the major private players in the financial system perceive the risk of debt default. This integration has had an impact on the formation, consolidation, and dissolution of the socio-political ruling coalition. On the one hand, the Convertibility Plan entailed a structural dependence on foreign currency inflow to ensure economic stability. On the other, the integration into the global financial system was modified after the Brady Plan. Unlike bank loans, the securities were traded goods in a market where lenders made short-term investment decisions based on their perceived risk of debt payment default. This perception, which involved a permanent monitoring of economic policy, determined the state's capacity to access borrowing and sustain foreign currency inflows.
