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Do personal characteristics of finance ministers affect the development of public debt?

  • Moessinger, Marc-Daniel

Using a unique dataset of personal characteristics of national finance ministers in Europe (1980 - 2010), I show that especially a finance minister's experience affects the development of public debt. Both a finance minister's experience gained in office and his political experience have an impact: The change of the debt to GDP ratio is negative the more experience a finance minister has gained as a minister of finance or in former positions as a national cabinet member. While the former result suffers from potential endogeneity, several arguments support that the latter result can be interpreted in a causal way. In contrast, a finance minister's educational background or ideology have no significant impact on public debt changes.

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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 12-068.

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Date of creation: 2012
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Handle: RePEc:zbw:zewdip:12068
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