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Income Distribution, Sovereign Debt, And Public Investment

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Author Info
Cem Karayalçin
Kathryn McCollister

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Abstract

We develop a political economy model of sovereign debt that shows that income inequality leads to popular pressures on the government to use foreign debt to finance a redistribution of income at the expense of productive public investment. Recognizing this fact, international lenders impose credit ceilings with the consequence that developing country borrowers invest less and grow slower. Copyright Blackwell Publishing Ltd 2005.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.0954-1985.2005.00157.x
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Publisher Info
Article provided by Blackwell Publishing in its journal Economics & Politics.

Volume (Year): 17 (2005)
Issue (Month): 3 (November)
Pages: 351-365
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Handle: RePEc:bla:ecopol:v:17:y:2005:i:3:p:351-365

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0954-1985

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This page was last updated on 2009-10-25.

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