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The "Three-D-Relationship": Do Democracy and Development Lead to Increased Debt?

Author

Listed:
  • Petr Blížkovský

    (European Committee of the Regions, Brussels, Belgium
    Mendel University in Brno, Czech Republic)

  • Luboš Střelec

    (Mendel University in Brno, Czech Republic)

  • Kateřina Blížkovská

    (Humboldt University, Berlin, Germany)

Abstract

The paper aims to test the research hypothesis of whether more democratic and economically developed countries tend to have higher public debts (the "Three-D-Relationship") or not. The hypothesis was tested on a panel of 91 countries over the period from 2012 to 2016 using a two way analysis of variance where debt was the dependent variable and regime type and income levels were factors. The results only partially confirmed the hypothesis. Higher democratic standards did correlate with higher debt levels. Similarly, higher income levels also correlated with bigger debt burden. Both "democracy" and "development" combined was not linked to higher debt levels.

Suggested Citation

  • Petr Blížkovský & Luboš Střelec & Kateřina Blížkovská, 2020. "The "Three-D-Relationship": Do Democracy and Development Lead to Increased Debt?," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 6(1), pages 21-36.
    • Handle: RePEc:men:journl:v:6:y:2020:i:1:p:21-36
    DOI: 10.11118/ejobsat.2020.003
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    More about this item

    Keywords

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    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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