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

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  • Moessinger, Marc-Daniel

Abstract

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.

Suggested Citation

  • Moessinger, Marc-Daniel, 2012. "Do personal characteristics of finance ministers affect the development of public debt?," ZEW Discussion Papers 12-068, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  • Handle: RePEc:zbw:zewdip:12068
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    1. What can Governors do?
      by chris dillow in Stumbling and Mumbling on 2012-11-27 20:22:21

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    Cited by:

    1. Heinemann, Friedrich & Janeba, Eckhard & Schröder, Christoph & Streif, Frank, 2016. "Fiscal rules and compliance expectations – Evidence for the German debt brake," Journal of Public Economics, Elsevier, vol. 142(C), pages 11-23.
    2. Niklas Potrafke & Markus Reischmann & Marina Riem & Christoph Schinke & David Streich, 2014. "Wirtschaftslage und Regierungsideologie in Europa," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 67(09), pages 18-25, May.
    3. Chatagny, Florian, 2015. "Incentive effects of fiscal rules on the finance minister's behavior: Evidence from revenue projections in Swiss Cantons," European Journal of Political Economy, Elsevier, vol. 39(C), pages 184-200.
    4. Potrafke, Niklas, 2017. "Partisan politics: The empirical evidence from OECD panel studies," Journal of Comparative Economics, Elsevier, vol. 45(4), pages 712-750.
    5. António Afonso & Maria João Guedes, 2014. "EU Finance Ministers, Capital Markets and Fiscal Outcomes," Working Papers Department of Economics 2014/01, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    6. Heinemann, Friedrich & Janeba, Eckhard & Moessinger, Marc-Daniel & Schröder, Christoph, 2013. "Revenue autonomy preference in German state parliaments," ZEW Discussion Papers 13-090, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    7. Hayo, Bernd & Neumeier, Florian, 2014. "Political leaders' socioeconomic background and fiscal performance in Germany," European Journal of Political Economy, Elsevier, vol. 34(C), pages 184-205.

    More about this item

    Keywords

    public finance; public debt; finance minister; personal characteristics;

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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