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Political consequences of consumer debt relief

Author

Listed:
  • Aidt, Toke
  • Asatryan, Zareh
  • Badalyan, Lusine

Abstract

We study consumer debt relief as a tool of distributive politics and ask if debt relief can influence elections. We utilize quasi-experimental variation generated by a very large debt relief program enacted in the Republic of Georgia by a private foundation that affected every sixth voter. We estimate that the program helped the incumbent candidate linked to the foundation win the 2018 Presidential election, and that its effects persisted into the next election. We show how economic power can translate into political power in polities with de jure competitive elections but with de facto weak accountability.

Suggested Citation

  • Aidt, Toke & Asatryan, Zareh & Badalyan, Lusine, 2022. "Political consequences of consumer debt relief," ZEW Discussion Papers 22-049, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:22049
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Consumer debt relief; distributive politics; vote buying; elections;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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