IDEAS home Printed from https://ideas.repec.org/a/bla/ecopol/v17y2005i3p351-365.html
   My bibliography  Save this article

Income Distribution, Sovereign Debt, And Public Investment

Author

Listed:
  • Cem Karayalçin
  • Kathryn McCollister

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.

Suggested Citation

  • Cem Karayalçin & Kathryn McCollister, 2005. "Income Distribution, Sovereign Debt, And Public Investment," Economics and Politics, Wiley Blackwell, vol. 17(3), pages 351-365, November.
    • Handle: RePEc:bla:ecopol:v:17:y:2005:i:3:p:351-365
    DOI: 10.1111/j.0954-1985.2005.00157.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.0954-1985.2005.00157.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.0954-1985.2005.00157.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Bertola, Giuseppe, 1993. "Factor Shares and Savings in Endogenous Growth," American Economic Review, American Economic Association, vol. 83(5), pages 1184-1198, December.
    2. Peter H. Lindert & Peter J. Morton, 1989. "How Sovereign Debt Has Worked," NBER Chapters, in: Developing Country Debt and the World Economy, pages 225-236, National Bureau of Economic Research, Inc.
    3. Susan M. Collins & Won-Am Park, 1989. "External Debt and Macroeconomic Performance in South Korea," NBER Chapters, in: Developing Country Debt and the World Economy, pages 121-140, National Bureau of Economic Research, Inc.
    4. Susan M. Collins & Won-Am Park, 1989. "II. External Debt and Macroeconomic Performance in South Korea," NBER Chapters, in: Developing Country Debt and Economic Performance, Volume 3: Country Studies - Indonesia, Korea, Philippines, Turkey, pages 151-152, National Bureau of Economic Research, Inc.
    5. Oded Galor & Joseph Zeira, 1993. "Income Distribution and Macroeconomics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(1), pages 35-52.
    6. Pushan Dutt & Devashish Mitra, 2016. "Endogenous trade policy through majority voting: an empirical investigation," World Scientific Book Chapters, in: The Political Economy of Trade Policy Theory, Evidence and Applications, chapter 4, pages 67-93, World Scientific Publishing Co. Pte. Ltd..
    7. Maurice Obstfeld & Kenneth S. Rogoff, 1996. "Foundations of International Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262150476, December.
    8. Roland Bénabou, 1996. "Inequality and Growth," NBER Chapters, in: NBER Macroeconomics Annual 1996, Volume 11, pages 11-92, National Bureau of Economic Research, Inc.
    9. Ben S. Bernanke & Julio J. Rotemberg (ed.), 1996. "NBER Macroeconomics Annual 1996," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522225, December.
    10. Berg, Andrew & Sachs, Jeffrey, 1988. "The debt crisis structural explanations of country performance," Journal of Development Economics, Elsevier, vol. 29(3), pages 271-306, November.
    11. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
    12. Eliana Cardoso, 1989. "The Macroeconomics of the Brazilian External Debt," NBER Chapters, in: Developing Country Debt and the World Economy, pages 81-100, National Bureau of Economic Research, Inc.
    13. Wiesner, Eduardo, 1985. "Latin American Debt: Lessons and Pending Issues," American Economic Review, American Economic Association, vol. 75(2), pages 191-195, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Carrera, Jorge & de la Vega, Pablo, 2021. "The impact of income inequality on public debt," The Journal of Economic Asymmetries, Elsevier, vol. 24(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Josef ZweimüLler, 2000. "Inequality, Redistribution, and Economic Growth," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 27(1), pages 1-20, March.
    2. Chang, Roberto, 1998. "Political party negotiations, income distribution, and endogenous growth," Journal of Monetary Economics, Elsevier, vol. 41(2), pages 227-255, April.
    3. Marta Simões & João Andrade & Adelaide Duarte, 2013. "A regional perspective on inequality and growth in Portugal using panel cointegration analysis," International Economics and Economic Policy, Springer, vol. 10(3), pages 427-451, September.
    4. Cristiano Perugini & Gaetano Martino, 2008. "Income Inequality Within European Regions: Determinants And Effects On Growth," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(3), pages 373-406, September.
    5. Jaume Ventura & Francesco Caselli, 2000. "A Representative Consumer Theory of Distribution," American Economic Review, American Economic Association, vol. 90(4), pages 909-926, September.
    6. Oscar Alfranca & Miguel-Angel Galindo, 2003. "Public expenditure, income distribution, and growth in OECD countries," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 9(2), pages 133-139, May.
    7. Amparo Castelló-Climent, 2004. "A Reassessment Of The Relationship Between Inequality And Growth: What Human Capital Inequality Data Say?," Working Papers. Serie EC 2004-15, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    8. Aysan, Ahmet Faruk, 2005. "The Role of Efficiency of Redistributive Institutions on Redistribution: An Empirical Assessment," MPRA Paper 17773, University Library of Munich, Germany.
    9. Manuel Oechslin, 2009. "Creditor protection and the dynamics of the distribution in oligarchic societies," Journal of Economic Growth, Springer, vol. 14(4), pages 313-344, December.
    10. Ugo Panizza, 1999. "Desigualdad del ingreso y crecimiento económico: elementos de juicio de datos de USA," Research Department Publications 4179, Inter-American Development Bank, Research Department.
    11. Andrés Rodríguez-Pose & Vassilis Tselios, 2010. "Inequalities in income and education and regional economic growth in western Europe," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 44(2), pages 349-375, April.
    12. Klaus Schmidt-Hebbel & José-Carlos Tello, 2014. "The Political Economy of Growth, Inequality, the Size and Composition of Government Spending," Working Papers 19, Peruvian Economic Association.
    13. Nobuhiro Mizuno & Katsuyuki Naito & Ryosuke Okazawa, 2017. "Inequality, extractive institutions, and growth in nondemocratic regimes," Public Choice, Springer, vol. 170(1), pages 115-142, January.
    14. Gravier-Rymaszewska, Joanna & Tyrowicz, Joanna & Kochanowicz, Jacek, 2010. "Intra-provincial inequalities and economic growth in China," Economic Systems, Elsevier, vol. 34(3), pages 237-258, September.
    15. Bourguignon, Francois & Verdier, Thierry, 2000. "Oligarchy, democracy, inequality and growth," Journal of Development Economics, Elsevier, vol. 62(2), pages 285-313, August.
    16. Daniele Checchi, 1999. "Inequality in Incomes and Access to Education. A Cross-Country Analysis (1960-90)," Working Papers 21, University of Milano-Bicocca, Department of Economics, revised May 1999.
    17. Christiane Clemens & Maik Heinemann, 2012. "Endogenous Growth, the Distribution of Wealth, and Optimal Policy under Incomplete Markets and Idiosyncratic Risk," CESifo Working Paper Series 3832, CESifo.
    18. Christiane Clemens & Maik Heinemann, 2005. "Endogenous Redistributive Cycles An Overlapping Generations Approach to Social Conflict and Cyclical Growth," Working Paper Series in Economics 5, University of Lüneburg, Institute of Economics.
    19. Chaudhry, Azam & Garner, Phillip, 2013. "The political economy of income comparisons and economic growth," Economic Modelling, Elsevier, vol. 31(C), pages 214-222.
    20. Bozhechkova, Aleksandra & Vashchelyuk, Natalia & Nazarov, Pavel & Perevyshin, Yuri & Tumanova, Elena & Shagas, Natalia, "undated". "Modeling the Dynamic of Economic Potential," Published Papers nvg143, Russian Presidential Academy of National Economy and Public Administration.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecopol:v:17:y:2005:i:3:p:351-365. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0954-1985 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.