Net capital inflows and party ideology
Leftist governments tend to pursue policies that favor labor over capital, which has led to the claim that such policies negatively impact net capital inflows. However, empirical evidence supporting this claim is limited. In a sample of Latin American countries for the period 1996-2020, I find that net capital inflows as a percentage of GDP are on average one percentage point lower during leftist governments than during centrist ones when both types of governments are unified (i.e., the party in control of the executive also holds a majority of seats in the legislature).