Ratings and the economics of obedience
How credit agencies discipline Uruguay — and why stability pleases the markets
When Standard & Poor’s affirmed Uruguay’s BBB+/A-2 rating in november this year 1, the language was familiar:
“Stable democracy, predictable policies, free press, peaceful changes of government, low corruption perception, consensus on key economic policies.”
For the financial world, these are marks of excellence. For Uruguay’s citizens, they are the vocabulary of discipline.
Credit ratings do more than assess a country’s ability to repay debt. They prescribe how a country should behave — and punish it if it deviates.
1. Ratings tell states what “good behavior” looks like
A sovereign rating is a manual of acceptable conduct:
- fiscal restraint,
- policy continuity,
- contract sanctity,
- low political volatility,
- minimal social conflict.
Step outside these boundaries — and the punishment is immediate: a downgrade, higher borrowing costs, market panic.
Governments learn quickly. They self-discipline.
Ratings agencies never need to dictate policy openly. Fear of a downgrade does the work.
2. Stability for investors ≠ prosperity for citizens
What S&P praises as “predictability” is not the vibrancy of democratic life — it is the security of investor returns.
Especially in Uruguay, where the state has signed:
- long-term PPAs guaranteeing fixed payments to private wind and solar investors for 20 years,
- contracts with UPM obliging UTE to buy surplus electricity at USD 72.5/MWh for two decades,
- industrial agreements that lock in conditions favorable to foreign capital.
This is what ratings agencies reward: a country where contracts benefiting investors will not be renegotiated, questioned, or challenged by political instability.
Predictability = obedience to capital.
3. Ratings discipline the government — and society
The psychological effect is powerful.
Policies that might serve the public — renegotiating overpriced PPAs, reforming UPM’s electricity deal, reducing reliance on party-clientelist employment — are avoided because they “might alarm the market.”
Governments use ratings as justification:
- “We cannot change this contract.”
- “We must avoid sending bad signals.”
- “The risk premium will rise.”
Thus, economic discipline becomes social discipline. Collective aspirations shrink to satisfy an external judge.
4. The global hierarchy hidden in technical language
Ratings agencies are not neutral technicians. They are instruments of the global financial order.
- Core countries do the rating.
- Peripheral countries are rated.
This reproduces a hierarchy: evaluator above, evaluated below. Uruguay is praised not because it innovates, but because it behaves.
A safe small economy, peaceful, orderly, predictable — an excellent debtor.
But the price of being “safe” is being politically stagnant.
5. Negri’s lens: ratings as apparatuses of Empire
From a Negrian perspective, ratings agencies are tools of Empire: transnational powers that govern without governing.
They discipline through:
- standards (AAA, BBB+),
- expectations (stability, low volatility),
- rewards (lower spreads),
- penalties (downgrades).
No soldiers. No interventions. Just norms that every government internalizes.
Uruguay — with its grey mood, immobilism, and myths of uniqueness — is a model subject of this discipline.
6. Uruguay: praised for the very things that block its autonomy
The same attributes S&P celebrates are those that freeze the country’s imagination:
- Predictable → unable to transform
- Consensus-driven → allergic to rupture
- Low conflict → pacified by clientelism
- Contract-respecting → chained to long-term rents
- Stable → immobilized
Uruguay is safe for investors precisely because it is not daring, not experimental, not transformative.
Its “virtues” are its limits.
Final thought: the cost of obedience
For credit agencies, Uruguay is a success story. For Uruguayans, it is a democracy in a holding pattern — disciplined from outside, immobilized from within.
As long as the country continues to optimize itself for ratings, it will remain a nation that:
- pays guaranteed profits to energy investors,
- honors every contract no matter how unequal,
- manages society through clientelist stability,
- and confuses predictability with prosperity.
The challenge is not to reject stability, but to reclaim it from the logic of obedience — and turn it into autonomy, creativity, and collective power.
Until then, Uruguay will remain exactly what the markets want: a predictable debtor in a world that rewards compliance over freedom.