Democracy, autocracy, and sovereign debt: How polity influenced country risk on the peripheries of the global economy, 1870–1913

IF 2.6 1区 历史学 Q1 ECONOMICS Explorations in Economic History Pub Date : 2022-07-01 DOI:10.1016/j.eeh.2022.101449
Ali  Coşkun Tunçer , Leonardo Weller
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Abstract

This article tests the influential democratic advantage hypothesis – that democratic governments have historically borrowed more cheaply than autocratic governments – in the context of the first financial globalization, from circa 1870 to 1913. We construct indicators of political regime types, then regress government bond spreads of 27 independent capital-importing countries on them. In contrast with the mainstream literature, the results suggest that democracies were associated with higher country risk. Our findings indicate that autocratic regimes had a significant advantage: democracies paid 5.7% more on their debt than autocracies, controlling for several financial and political variables. This gap is the equivalent of 35.4% of the negative effect defaults had on credit costs. Our conclusions hold when allowing for different definitions of political regime type and bond spreads. The correlations identified also find support in qualitative evidence, according to which creditors favored autocracies for being politically more stable than democracies.

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民主、独裁和主权债务:1870-1913年,政治如何影响全球经济边缘的国家风险
本文在1870年至1913年第一次金融全球化的背景下,检验了有影响力的民主优势假说——民主政府在历史上比专制政府借贷成本更低。本文构建了政权类型指标,并对27个独立资本输入国的国债息差进行了回归。与主流文献相反,研究结果表明,民主政体与较高的国家风险相关。我们的研究结果表明,专制政权具有显著的优势:在控制了几个金融和政治变量的情况下,民主国家比专制国家多支付5.7%的债务。这一差额相当于违约对信贷成本的负面影响的35.4%。我们的结论在考虑政体类型和债券利差的不同定义时成立。所发现的相关性也得到了定性证据的支持,根据定性证据,债权人更喜欢专制国家,因为它在政治上比民主国家更稳定。
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来源期刊
CiteScore
2.50
自引率
8.70%
发文量
27
期刊介绍: Explorations in Economic History provides broad coverage of the application of economic analysis to historical episodes. The journal has a tradition of innovative applications of theory and quantitative techniques, and it explores all aspects of economic change, all historical periods, all geographical locations, and all political and social systems. The journal includes papers by economists, economic historians, demographers, geographers, and sociologists. Explorations in Economic History is the only journal where you will find "Essays in Exploration." This unique department alerts economic historians to the potential in a new area of research, surveying the recent literature and then identifying the most promising issues to pursue.
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