How did international banks assess the creditworthiness of the socialist states of Eastern Europe? Were macroeconomic data sufficient to value the financial reputation of communist governments? How did private lenders factor in politics in their country risk reports on the emergent East European market in sovereign borrowing? This project explores the changing metrics used by international banks to assess the creditworthiness of Poland, Romania and Yugoslavia from the 1970s to the 1990s. I argue that the debt crisis of the early 1980s was a pivotal moment that pushed international banks (often in conjunction with the International Monetary Fund and the World Bank) to factor ongoing economic and political reform into their evaluations of creditworthiness. This language of social change, I show, expressed at one and the same time the increased supervisory role assumed by the IMF and the banks’ loss of confidence in “totalitarianism” as a guarantee of Eastern Europe’s financial reputation, with consequences for the ways in which the post-socialist transition was understood by financial markets.

A full-length study is available here.