Like most international relations researchers over the past 20 years, scholars of sovereign debt have been preoccupied with the effects of regime type: democracy versus autocracy. This is most evident in their quest to prove or disprove the existence of a democratic advantage in sovereign debt markets. Although this work is important, regime type cannot explain all the variance in sovereign credit outcomes. Consequently, the focus on regime type has constrained the study of this crucial topic. Cameron Ballard-Rosa’s book moves past the singular focus on regime type. He spares us additional regressions that seek to identify the effect of this or that national institution on sovereign debt burdens, sovereign creditworthiness, or the probability of sovereign default. Instead, he attempts to explain which democracies and which autocracies are most likely to experience a sovereign default.

Ballard-Rosa’s Democracy, Dictatorship, and Default points to a seemingly novel variable that helps explain sovereign default in each regime type context: urbanization. Drawing on a rich political economy literature that stresses the importance of the political conflict between land and labor, he develops a theory about how a leader’s decision to default is shaped by the regime type they must survive within and the degree of urbanization within the state’s borders. Notably, the impact of urbanization is conditional on regime type.

In brief, the book draws on the idea that urbanization conditions the threat that protest and dissent imposes on autocratic leaders. In short, dissent is more threatening in urban locales because an aggrieved population can better overcome collective action and informational problems than those with grievances in rural areas. As such, to avoid urban protests in response to austerity measures (like curtailing food subsidies), the leaders of autocratic countries will have a greater incentive to default on sovereign debt. Austerity, on average, will pose a greater risk to their political survival. In democracies, in contrast, Ballard-Rosa argues that the mobilization advantage of population density is reversed. Because voting, not revolt, is the primary mechanism of leader removal under democracy, the book argues that those with an electoral mobilization advantage will have an easier time defending their interests during an austerity or default trade-off. Notably, the common interests of rural voters relative to a diverse urban constituency mean that leaders will have a harder time cutting off subsidies and spending directed at rural districts. As the electorate grows more rural, the survival advantage of default grows.

The theoretical contribution is notable and is competently supported by rigorous quantitative analysis and five illustrative case studies. Ballard-Rosa finds that urbanization has a large substantive effect on the probability of default in both autocracies (positive) and democracies (negative) in an analysis of within-country variation from 1960 to 2009. The analysis is robust to multiple control variables, including a state’s geopolitical alignment, government spending, reliance on a borrowing mechanism (bond or commercial loan), oil rents, repressive capacity, and regime age, among others. Similarly, the cases studies of Zambia, Malaysia, Costa Rica, Jamaica, and Turkey provide excellent illustrations of the theory’s causal mechanisms in action. In all, Ballard-Rosa presents a strong case for the importance of urbanization and how it operates through autocrats’ sensitivity to food-price–related protests and democracies’ concern for the electoral influence of agriculture.

The empirical analysis does leave some lingering questions that the author does not have the space to fully develop in the book; these would be interesting to explore in future research. First, it is not clear what role default plays in regime transition from autocracy to democracy and back again. Given that the evidence is based on within-country variance and the effects are estimated in separate samples of democracies and autocracies, it would be useful to understand how prior default, in conjunction with urbanization, plays a role in selection into these groups. For example, the defaults of Latin American autocracies in the 1980s were followed by both market and political reforms in the 1990s. It would be interesting to tease out how the legacies of these reforms influence a country’s demographic development and future probability of default. One possibility is that heavily urbanized autocracies defaulted, which facilitated economic reforms that reduced the probability of future defaults once these states became democracies. Although the analysis controls for a variety of factors, including states having ongoing IMF programs, it does not address the impact of previous reforms on contemporary default probabilities.

In a similar vein, I would have appreciated a deeper conversation about the conditions and political legacies that cause urbanization. Most political economy scholars have a good handle on the correlates of default but less so on the development of urbanization. Absent the latter, I found it difficult to properly assess the identification strategy. For example, urbanization may be a byproduct of government strategies to develop manufacturing sectors. Post–World War II import industrialization strategies quite explicitly incentivized movement to urban environments through the promotion of heavy industry and taxes on agricultural production via marketing boards. Such policies notably led to high deficits and debt burdens; if they are also correlated with regime type, it may be the case that the consequences of import substitution (urbanization and demand for food imports) may confound the relationship between urbanization and default under autocracy. Yet, I stress that this concern is only speculative and meant to demonstrate that urbanization is likely not exogenous but potentially a product of the same policies that influence fiscal politics.

Lastly, quantitative political science is beginning to appreciate the varieties of democracies and autocracies. We have a good idea that large coalition democracies are unlikely to default. Yet, we have little understanding of how the incentives of different autocratic institutions shape default and how they might be influenced by urbanization. If urbanization does condition the political incentives of autocrats as Ballard-Rosa contends, it is possible that they adopt institutions to insulate themselves from this pressure. As the field begins to explore the impact of variables like urbanization, it might be useful to examine the downstream effects they have on the adoption of institutions, like coup-proofing or succession rules. Such institutions may have a strong impact on economic policies that may have separate effects on debt-related outcomes and other interesting political economy outcomes.

In all, Ballard-Rosa should be congratulated for this creative and thought-provoking contribution. It serves as a model for young scholars to think out of the (regime type) box and explore how more structural factors help shape political incentives. More importantly, it demonstrates the payoff from considering how governments deploy fiscal resources, rather than just assuming that they are spending on private or public goods. There are likely to be intervening factors that place further constraints on both democratic and autocratic leaders’ choice sets.