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The Political Economy Of Fiscal Prudence In Historical Perspective

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  • MARK DINCECCO

Abstract

This paper uses a new panel dataset to perform a statistical analysis of political regimes and financial rectitude over the long run. Old Regime polities in Europe typically suffered from fiscal fragmentation and absolutist rule. By the start of World War I, however, many such countries had centralized institutions and limited government. Panel regressions indicate that political transformations toward centralized and limited regimes led to significant improvements in fiscal prudence. Dynamic estimations and structural breaks tests reinforce these findings. The results suggest that good financial housekeeping is one mechanism through which political reforms reduce sovereign credit risk.

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  • Mark Dincecco, 2010. "The Political Economy Of Fiscal Prudence In Historical Perspective," Economics and Politics, Wiley Blackwell, vol. 22(1), pages 1-36, March.
    • Handle: RePEc:bla:ecopol:v:22:y:2010:i:1:p:1-36
    DOI: 10.1111/j.1468-0343.2009.00349.x
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    2. Tolga Aksoy, 2013. "Economic Reforms and Growth in Developing Countries," EcoMod2013 5318, EcoMod.
    3. Stasavage, David, 2016. "What we can learn from the early history of sovereign debt," Explorations in Economic History, Elsevier, vol. 59(C), pages 1-16.
    4. Cingolani L, 2013. "The State of State Capacity : a review of concepts, evidence and measures," MERIT Working Papers 2013-053, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    5. David Dolejší, 2022. "Feudal bargain in Prague: The rise, spread, and fall of craft guilds," Rationality and Society, , vol. 34(2), pages 237-267, May.
    6. Tolga Aksoy, 2019. "Structural reforms and growth in developing countries," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 22(4), pages 325-350, October.
    7. J. Stephen Ferris, 2010. "Fiscal Policy from a Public Choice Perspective," Carleton Economic Papers 10-10, Carleton University, Department of Economics.
    8. Krzysztof Beck & Michał Możdżeń, 2020. "Institutional Determinants of Budgetary Expenditures. A BMA-Based Re-Evaluation of Contemporary Theories for OECD Countries," Sustainability, MDPI, vol. 12(10), pages 1-31, May.

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