Commodity Windfalls, Democracy and External Debt

19 Pages Posted: 3 Jun 2012

See all articles by Rabah Arezki

Rabah Arezki

International Monetary Fund (IMF)

Markus Brückner

affiliation not provided to SSRN

Date Written: June 2012

Abstract

We examine the effects that windfalls from international commodity price booms have on external debt in a panel of 93 countries during the period 1970–2007. Our main finding is that increases in the international prices of exported commodity goods lead to a significant reduction in the level of external debt in democracies but to no significant reduction in the level of external debt in autocracies. To explain this finding, we show that in autocracies commodity windfalls lead to a statistically significant and quantitatively large increase in government consumption expenditures. In democracies government consumption expenditures did not increase significantly.

Suggested Citation

Arezki, Rabah and Brückner, Markus, Commodity Windfalls, Democracy and External Debt (June 2012). The Economic Journal, Vol. 122, Issue 561, pp. 848-866, 2012. Available at SSRN: https://ssrn.com/abstract=2073106 or http://dx.doi.org/10.1111/j.1468-0297.2012.02508.x

Rabah Arezki (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Markus Brückner

affiliation not provided to SSRN

No Address Available

Register to save articles to
your library

Register

Paper statistics

Downloads
1
Abstract Views
367
PlumX Metrics