State-narco networks and the ‘War on Drugs’ in post-transition Bolivia, with special reference to 1989-1993

This thesis examines the development of state-narco networks in post-transition Bolivia. Mainstream discourses of drugs tend to undertheorise such relationships, holding illicit economies, weak states and violence as synergistic phenomena. Such assumptions fail to capture the nuanced relations that emerge between the state and the drug trade in different contexts, their underlying logics and diverse effects. As an understudied case, Bolivia offers novel insights into these dynamics. Bolivian military authoritarian governments (1964-1982), for example, integrated drug rents into clientelistic systems of governance, helping to establish factional coalitions and reinforce regime authority. Following democratic transition in 1982 and the escalation of US counterdrug efforts, these stable modes of exchange between the state and the coca-cocaine economy fragmented. Bolivia, though, continued to experience lower levels of drug-related violence than its Andean neighbours, and sustained democratisation despite being a major drug producer. Focusing on the introduction of the Andean Initiative (1989-1993), I explore state-narco interactions during this period of flux: from authoritarianism to (formal) democracy, and from Cold War to Drug War. As such, the thesis transcends the conventional analyses of the drugs literature and orthodox readings of Latin American narco-violence, providing insights into the relationship between illicit economies and democratic transition, the regional role of the US, and the (unintended) consequences of drug policy interventions. I utilise a mixed methods approach to offer discrete perspectives on the object of study. Drawing on documentary and secondary sources, I argue that state-narco networks were interwoven with Bolivia’s post-transition political settlement. Uneven democratisation ensured pockets of informalism, as clientelistic and authoritarian practices continued. This included police and military autonomy, and tolerance of drug corruption within both institutions. Non-enforcement of democratic norms of accountability and transparency was linked to the maintenance of fragile political equilibrium. Interviews with key US and Bolivian elite actors also revealed differing interpretations of state-narco interactions. These exposed competing agendas, and were folded into alternative paradigms and narratives of the ‘war on drugs’. The extension of US Drug War goals and the targeting of ‘corrupt’ local power structures, clashed with local ambivalence towards the drug trade, opposition to destabilising, ‘Colombianised’ policies and the claimed ‘democratising mission’ of the Bolivian government. In contrasting these US and Bolivian accounts, the thesis shows how real and perceived state-narco webs were understood and navigated by different actors in distinct ways. ‘Drug corruption’ held significance beyond simple economic transaction or institutional failure. Contestation around state-narco interactions was enmeshed in US-Bolivian relations of power and control.

The wealth effects of commercial bank securities issuances announcement

Banks are often excluded in corporate finance research mainly because of the regulatory concerns. Compares to non-bank firms, banks are heavily regulated due to its special economic role of money and the uncertainty. Heavy regulation on banks could reduce the information asymmetry between the managers and investor by limiting the behaviour of banks at the time of the Seasoned Equity Offering (SEO), and by increasing the incentive for banks to avoid excessive risk-taking. Therefore, the market may be less likely to assume that bank issued securities signal information that the bank is overvalued compared to their non-bank counterparts. The objective of this thesis is therefore to examine commercial banks issued securities announcement effect. Three interrelated research questions are addressed in this thesis: 1) What is the difference in convertible bond announcement effect between banks and non-banks firm? 2) What is the difference in SEO announcement effect between banks and non-banks? 3) How do the stringency levels of bank regulation impact on the announcement effects of bank issued SEO? By using the U.S. convertible bond and SEO data from 1982 to 2012, I find that the bank issued a convertible bond and SEO announcement experience higher cumulative abnormal return than non-bank. This is consistent with the view that bank regulation reveals positive information about banks. Since banks are heavily regulated, the market is less likely to assume that the issuance of the convertible bond and SEO by banks signals information that is overvalued. These results are robust after controlling for a number of firm-, issue-, and market-specific characteristics. These results are robust by considering the different categories of non-bank industries by undertaking tests in relation to the differences in the CARS upon convertible bond/ SEO across industries, as well as the unbalanced sample between banks and non-banks by using the matched sample analysis. However, the relation between the stringency level of bank regulation and bank issued securities announcement effect may be nonlinear. As hypothesised, I find that bank regulation has an inverted U-shaped relation with the announcement effect of bank SEO by using the SEO data across 21 countries from 2001 to 2012. Under a less bank regulation environment, the market reacts more positively to the bank SEO announcement for an increase in the level of bank regulation. However, the bank SEO announcement effects become more negative if the bank regulation becomes too stringent. This inverted U-shaped relationship is robust after I use the exogenous cross-country, cross-year variation in the timing of the Basel II adoption as the instrument to assess the causal impact of bank regulation on SEO announcement effects. However, the stringency of regulation does not have a significant impact on the announcement effects of involuntary bank equity issuance.