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Pawned States: State Building in the Era of International Finance

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A book talk with Didac Queralt, Assistant Professor of Political Science, Yale University

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Pawned States deftly explains how historical access to cheap credit has driven state weakness and a lack of political reform across the developing world. Queralt’s theoretical and empirical tools are state of the art, as is his vast historical database. A remarkable achievement.”—Mark Dincecco, coauthor of From Warfare to Wealth: The Military Origins of Urban Prosperity in Europe

In the nineteenth century, many developing countries turned to the credit houses of Europe for sovereign loans to balance their books and weather major fiscal shocks such as war. This reliance on external public finance offered emerging nations endless opportunities to overcome barriers to growth, but it also enabled rulers to bypass critical stages in institution building and political development. Pawned States reveals how easy access to foreign lending at early stages of state building has led to chronic fiscal instability and weakened state capacity in the developing world.

Drawing on a wealth of original data to document the rise of cheap overseas credit between 1816 and 1913, Didac Queralt shows how countries in the global periphery obtained these loans by agreeing to “extreme conditionality,” which empowered international investors to take control of local revenue sources in cases of default, and how foreclosure eroded a country’s tax base and caused lasting fiscal disequilibrium. Queralt goes on to combine quantitative analysis of tax performance between 1816 and 2005 with qualitative historical analysis in Latin America, Asia, Africa, and the Middle East, illustrating how overreliance on external capital by local leaders distorts their incentives to expand tax capacity, articulate power-sharing institutions, and strengthen bureaucratic apparatus.

Panoramic in scope, Pawned States sheds needed light on how early and easy access to external finance pushes developing nations into trajectories characterized by fragile fiscal institutions and autocratic politics.



Order Pawned States: State Building in the Era of International Finance from Princeton University Press. You can use code discount code “P289”.



Didac Queralt is Assistant Professor in the Department of Political Science at Yale University. His research examines the historical political economy of fiscal institutions from three different angles: war, trade, and external finance. He is the author of Pawned States: State Building in the Era of International Finance (Princeton University Press, 2022) and his research has been featured in the American Journal of Political Science, International Organization, Explorations in Economic History, Quarterly Journal of Political Science, and Comparative Political Studies, among others.



Leslie Johns is a professor of political science and law at UCLA. She is also Associate Director of the Burkle Center for International Relations.

Her research focuses on international law, organizations, and political economy.

In 2022, Cambridge University Press published her newest book, Politics and International Law: Making, Breaking, and Upholding Global Rules. You can access related news stories on the book's Twitter account: @PoliticsIntlLaw

Her work appears in the American Political Science Review, International Organization, Journal of Conflict Resolution and the Journal of Politics. Her first book–Strengthening International Courts: The Hidden Costs of Legalization–was published in 2015 by the University of Michigan Press. She received the Michael Wallerstein Award for political economy in 2017.

She is a former term member of the Council on Foreign Relations, and a former research fellow at the Niehaus Center for Globalization and Governance at Princeton University (2012-2013 and 2021-2022).