Fragmented Politics and Public Debt

In this paper, we study the impact of fragmented politics on public debt-in particular, between two consecutive legislative elections. Using data for 92 advanced and developing countries during 1975-2015, we find a positive association between political fragmentation and public debt changes. Corrupt...

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Main Author: Crivelli, Ernesto
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2016, 2016
Series:IMF Working Papers
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Summary:In this paper, we study the impact of fragmented politics on public debt-in particular, between two consecutive legislative elections. Using data for 92 advanced and developing countries during 1975-2015, we find a positive association between political fragmentation and public debt changes. Corruption magnifies the effects; with higher perceived corruption, political fragmentation has a bigger sway on debt increases. The influence of political fragmentation on debt dynamics is somewhat asymmetric, with larger and more significant effects during periods of debt reduction. Establishment of fiscal councils helps attenuate the negative impact of political fragmentation on public debt dynamics
Physical Description:31 p.
ISBN:1475537026
9781475537024