Political Regimes and Sovereign Credit Risk in Europe, 1750-1913

Dincecco, Mark

doi:10.2139/ssrn.1015776

Political Regimes and Sovereign Credit Risk in Europe, 1750-1913

European Review of Economic History, Vol. 13, No. 1

40 Pages Posted: 25 Sep 2007 Last revised: 30 Jan 2009

See all articles by Mark Dincecco

Mark Dincecco

University of Michigan at Ann Arbor

Date Written: August 12, 2008

Abstract

This paper uses a new panel data set to perform a statistical analysis of political regimes and sovereign credit risk in Europe from 1750 to 1913. Old Regime polities typically suffered from fiscal fragmentation and absolutist rule. By the start of World War I, however, many such countries had centralized institutions and limited government. Panel regressions indicate that centralized and/or limited regimes were associated with significant improvements in credit risk relative to fragmented and absolutist ones. Structural breaks tests also reveal close relationships between major turning points in yield series and political transformations.

JEL Classification: N23, P16, O16

Suggested Citation: Suggested Citation

Dincecco, Mark, Political Regimes and Sovereign Credit Risk in Europe, 1750-1913 (August 12, 2008). European Review of Economic History, Vol. 13, No. 1, Available at SSRN: https://ssrn.com/abstract=1015776 or http://dx.doi.org/10.2139/ssrn.1015776