This book argues that investor risk in emerging markets hinges on the company a country keeps. When a country joins an economic agreement with states that are widely known to be stable, it looks less risky. Conversely, when a country joins a group with more unstable members, it looks more risky.

This book argues that investor risk in emerging markets hinges on the company a country keeps. When a country signs on to an economic agreement with states that are widely known to be stable, it looks less risky. Conversely, when a country joins a group with more unstable members, it looks more risky. Investors use the company a country keeps as a heuristic in evaluating that country's willingness to honor its sovereign debt obligations. This has important implications for the study of international cooperation as well as of sovereign risk and credibility at the domestic level.