City-republics have traditionally served as exemplars of participatory government. Their bottom-up organization would seem to suggest an alternative path to representative emergence. The three chapters of Part II address this challenge of equifinality; this chapter does so in two ways. First, it points out that republics are different forms of governance than representative polities, as they eschew a central executive and don't involve the integration of varied social groups. Second, despite such differences, republics and municipal governance can also be shown to reflect the basic logic of this book, as they were preceded by a period of centralized rule under conditional relations. These enabled the institutional learning that was necessary for participatory institutions to consolidate. The absence of an executive, however, also meant that they did not survive over the long term. These points are demonstrated by an examination of Italian city-states and of the Low Countries. Both Flanders and Holland had a thriving urban sector, but they retained their participatory institutions longer because the exective authority of the count was comparatively greater. The Swiss Cantons are briefly considered. The role of trade emerges as endogenous to political organization.

Incentives to attend parliament should have been common to both the French and the English nobility . Yet only the English nobility ended up being regularly involved in parliamentary proceedings. Their presence was fundamental for functional fusion and institutional layering to occur. Only where the nobility was compelled to attend parliament, especially in connection to its judicial functions, did the crown have a regular forum to raise taxation. Justice provided the regularity that taxation did not, allowing the institution to consolidate. Conversely, when the most powerful groups were regularly present in a central institution, they were able to solve their collective action problem and cooperate to oppose the crown. The chapter thus shows that the capacity of the English crown to compel nobles for judicial and political service was greater than that of France. The point is further established through the literature on Legal Origins, which explains the divergence of Common from Civil Law, as well as by an assessment of the remarkable level of conscription of English subjects to perform judicial functions that were disbursed by paid officials in France.

Chapter 4 employs an originally constructed data set, the China Global Finance Index, to conduct cross-national tests spanning eighteen Latin American countries from 1990 to 2017. The index characterizes Chinese policy loans by their ?nancing channel (state-to-state vs. market-based) for each national-level investment project.The chapter ?nds that China’s state-to-state loans, as a share of a country’s external public debt, are positively correlated with budget de?cits, supporting the primary hypothesis that China’s patient capital expands governments’ ?scal policy space. In exchange for this lack of policy conditionality, however, policymakers tend to have more extensive commercial conditionality. Notably, when Chinese ?nancing is instead directly booked with corporate enterprises through private procurement in the marketplace, these commercial conditions are less extensive. China’s patient capital behaves more like long-term equity capital given the underlying private sector competition promoted by domestic procurement laws. National governments do not gain additional ?scal space and are more likely to comply with policy conditionality.

How does China’s emergence as a global creditor a?ect national policymaking? The international and comparative political economy literature has long debated the extent to which international capital mobility constrains national autonomy, but has mainly focused on private capital ?ows. Incorporating China’s state-led capitalism into this political economy framework, I expect that Chinese credit enhances national governments’ room to maneuver. It is a distinct form of long-term capital characterized by a risk-tolerant ?nancial system that marshals China’s patient form of domestic capital internationally. Its lack of policy conditionality endows governments with more ?scal space to intervene in their economies. For developing country governments facing strong redistributive pressures, su?cient ?scal space to supply more jobs, higher wages, and better public services is often key to political survival.However, patient capital has its costs. The ?ne print of these state-to-state deals often involves commercial conditions, ranging from contracting with Chinese ?rms and suppliers to providing state guarantees or commodity collateral, that risk intensifying national debt and dependency.

Russia provides the final testing ground for the concept of conditionality. This chapter shows how the limited incidents of representation in sixteenth and seventeenth-century Russia can be explained through the conditional rights to land granted to the lower nobility in order to counter the strength of the upper nobility, the boyars. This makes Russia another case of "second-best-constitutionalism." At that level, it displayed striking similarities to patterns observed in England, leading to the conclusion that the two cases differed not in the institutions that were being created but in the capacity of the state to enforce them. This position is at odds with common conceptions of the Russian tsar as all-powerful, so the chapter offers evidence to counter this assumption. It examines the weak control over the boyars, the limited taxing capabilities, and the mass enserfment of peasants to show how they either reflect or result from state weaknesses. The chapter then describes how these conditions interacted with the emergence of representation in Russia, as well as how they explain its demise.

The final chapter in Part III examines more directly the claim that parliaments are a consequence of commercial activity by looking at two cases, which have dominated especially neo-institutionalist accounts due to their thriving wool trades, England and Castile. The main mechanism tying trade to representative institutions is that of capital mobility, which is assumed to endow mercantile groups with bargaining powers. The section on England shows that taxes on mobile capital were not key for representation, as they were not bargained for in Parliament. Indirect taxation was also far less than direct taxation in the critical period of parliamentary emergence. Moreover, bargains that did occur resulted in sectoral privileges, not constitutional gains. In fact, the chapter shows how mercantile interests and the collective action of merchants were endogenous to state capacity. The section on the Castilian Mesta shows how the assumed inefficiencies of this commercial system can be traced to the political weakness highlighted in chapter 5.

Catalonia is another major case that appears to connect trade to municipal governance and bottom-up organization, a connection exemplified by its history after the fourteenth century. This chapter shows that these developments are also predicated on a prior period of institutional learning under strong counts, by examining the key variables in this account. It shows how early representative activity did not include towns or relate to taxation. It examines the role of the count in the pacification of the county and in the provision of justice. It then shows how functional fusion occured in the central representative institutions, the Corts, and how territorial anchoring was stronger than in Castile but weaker than in England. Power over the nobility is shown through an analysis of their fiscal obligations. As a result, the municipal structure of Barcelona that has elicited the assessment of a strong constitutional tradition in a bottom-up mode is shown to be preceded by a precocious period of institution-building under strong counts.

Part V integrates the different strands in the previous chapters to explain how they account for why representation consolidated in England but not in the non-Western cases. Existing accounts typically focus on the lack of certain cultural templates, whether corporate bodies and estates or corporations. Two alternatives are first examined, namely that the difference can be explained by the absence of two of the main components of representative emergence in the English case, the principle of representation itself and the demand for justice mediated through petitions. Both Russia and the Ottoman Empire exhibited both traits, however. So then the chapter revises the common assumption that western representation depended on greater corporate rights and on the end of collective responsibility. Rather, the critical difference was that the English state was better able to resist the demands of groups for corporate privileges, at least in the period of parliamentary emergence, and to impose collective responsibility on a state-derived (rather than tradition-based) basis. This power is exemplified by its capacity to tax the nobility, which, as we have seen other European leaders were generally unable to do.

This chapter offers some empirical support to a main claim in the book, namely that the capacity of the English state was higher than that of France, by examining the typical indicator of capacity, taxation. It focuses particularly on the fiscal burden of the nobility, to show that it was relatively heavy, especially if debt is also considered. Once compelled to contribute to taxation, the English nobility had greater incentives to participate in the institution where it was negotiated, as well as to accept its extension over the broader population. By contrast, the fate of the French Estates-General moved in tandem with the taxation of the nobility; when noble fiscal privileges were consolidated, the institution declined. The chapter also provides comparative data of both fiscal and military extraction, to support the claim of greater infrastructural capacity of the English crown.

Chapter 7 assesses the cost and bene?ts of China’s commercial conditionality by employing extensive qualitative evidence, including more than 200 interviews with Chinese creditors and Latin American debtors, and in some cases, examining the original loan contracts. This chapter also evaluates the extent to which China can foster good governance and sustainable development without policy conditionality. For example, these loan provisions, which typically involve some combination of Chinese foreign content and commodity guarantees, are designed to improve the global competitiveness of Chinese ?rms. However, they may also impose costs on Latin American countries. Preferential treatment for Chinese capital inputs and machinery may undermine Latin America’s industrial competitiveness. At the same time, commodity guarantees embedded in loans-for-oil agreements risk eroding commodity proceeds that could otherwise be channeled toward domestic spending or reinvestment in state energy ?rms. Perhaps most important, China’s tendency to focus on commercial rather than policy terms may encourage governments to spend beyond their means, catalyzing future debt problems.

This book’s macroeconomic analysis suggests Chinese ?nancing could o?er nations a development opportunity by exploiting Western ?nance’s Achilles's heel: the maturity mismatch between the capital market’s short-term ?nancing and debtor nations’ long-term development goals. Chinese policy banks have the capacity to ?nance big-ticket public infrastructure projects over a long-term horizon. However, Chinese capital also has its drawbacks given its tendency to secure its lending with microeconomic ties or commercial conditions embedded in its loan contracts.Popular attention has also focused on the question of whether Chinese lending is a form of "debt-trap" diplomacy used as a coercive economic tool to acquire long-run strategic assets. Rather than debt-trap diplomacy, however, this book argues, China’s tendency to invest in maximizing long-run markets rather than short-run profits has at times ensnarled its policy banks in creditor traps where they must lend defensively to recover their initial investments. Chapter 8 also examines how these creditor-debtor relationships have changed over time and how they are likely to continue to evolve in a post-coronavirus world.

This chapter provides an overview of this book, which examines China’s economic expansion into the Western Hemisphere from both the creditor and debtor perspectives while making several contributions. First, this study brings new and original data to bear on the classic question of states’ room to maneuver under ?nancial globalization, a question that is increasingly pertinent given the rise of state-led ?nance over the past two decades. Second, employing a mixed-method approach, this book sheds light on the behavior of state-led ?nancing, particularly how its commercial conditionality rather than policy conditionality a?ects national-level governance decisions. Finally, it makes an important theoretical contribution by disaggregating the structure of global ?nance. The globalization scholarship suggests local state capacity and institutional development can mitigate "race to the bottom" pressures, but this study ?nds that the type of international investment (state vs. market) can also in?uence the extent of policy discretion. The emergence of China’s state-led ?nancing endows governments with greater ?scal space, or the ability to sustain their spending through volatility.