Financialization, Credit Rating Agencies, and “Policy Space”: The Brazilian experience Pedro Lange Netto Machado and Luiz Fernando de Paula

This paper analyzes the restrictions imposed by financialization on domestic policy space, especially in emerging economies, in light of the actions of credit rating agencies. The working hypothesis is that these agencies, in their interaction with governments, act to constrain the policy space from their position in the international financial system. Thereby, they operate in favor of the financial markets’ agenda through the issuance of sovereign ratings and at the discursive level. The methodology draws on the case study of Brazil, based on sovereign ratings and reports issued by S&P Global, Moody’s, and Fitch Ratings, which  shows that such agencies have a vast repertoire to promote the orthodox neoliberal agenda in the national political and economic process.