Generalizing the Findings with Statistical Analyses

Qualitative evidence is useful in tracing the process by which borrowing decisions are made. However, the question is how generalizable the findings from Ecuador, Colombia, and Peru are to other developing countries. Statistical analyses can provide insights into whether domestic political dynamics within recipient countries affect borrowing portfolios across developing countries. This chapter describes three challenges that need to be resolved before such analyses are possible: First, data on incoming loans must be obtained, which is particularly difficult for Chinese loans. Second, estimating the political strength of societal interest groups is challenging, as it cannot be observed directly. Third, analyzing a compositional variable (i.e., the loan shares of four creditors that must add up to 100%) presents a methodological challenge: increasing the share of loans obtained from one type of creditor must be matched by a corresponding decrease in the share of loans obtained from other creditors.