The timing of sovereign defaults over electoral terms
I construct a database that maps the timing of sovereign default decisions into elected politicians' terms of office, that provides an empirical means of investigating political economy theories of sovereign default. I find no robust patterns in the timing of default decisions over terms of office. I also find no evidence in support of the political reputation theory of sovereign debt repayment. Finally, there is some tentative evidence that elected leaders who default are also those more likely to be re-elected. Motivated by anecdotal evidence, I use a stylised model of political leaders with career concerns to demonstrate how this can occur when politicians care about re-election.
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- Gilat Levy, 2005.
RAND Journal of Economics,
The RAND Corporation, vol. 36(2), pages 275-297, Summer.
- Levy, Gilat, 2003. "Careerist Judges," CEPR Discussion Papers 3948, C.E.P.R. Discussion Papers.
- Gilat Levy, 2003. "Careerist Judges," STICERD - Theoretical Economics Paper Series 457, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Levy, Gilat, 2005. "Careerist judges," LSE Research Online Documents on Economics 939, London School of Economics and Political Science, LSE Library.
- Levy, Gilat, 2003. "Careerist judges," LSE Research Online Documents on Economics 3621, London School of Economics and Political Science, LSE Library.
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