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Democratic constraints and adherence to the classical gold standard

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  • Kramer, Bert S.
  • Milionis, Petros

Abstract

We study how political institutions affected the decision of countries to adhere to the classical gold standard. Using a variety of econometric techniques and controlling for a wide range of relevant economic and political factors, we find that the probability of adherence to the gold standard before World War I was ceteris paribus lower for countries which were more democratic. This effect can be linked to how open the political process was to different segments of the population and the extent of political competition resulting from that. The effect was particularly relevant for peripheral countries and it influenced both the decision of countries to adopt the gold standard as well as the decision to suspend it.

Suggested Citation

  • Kramer, Bert S. & Milionis, Petros, 2022. "Democratic constraints and adherence to the classical gold standard," Explorations in Economic History, Elsevier, vol. 84(C).
    • Handle: RePEc:eee:exehis:v:84:y:2022:i:c:s0014498321000632
    DOI: 10.1016/j.eeh.2021.101436
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    More about this item

    Keywords

    First globalization era; Gold standard; Democracy; Political institutions;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative

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