US State Constitutional Entrenchment and Default in the Nineteenth Century

Journal of Institutional Economics (Forthcoming)

35 Pages Posted: 2 Jan 2019 Last revised: 9 Jul 2019

See all articles by John A. Dove

John A. Dove

Troy University - Manuel H. Johnson Center for Political Economy

Andrew T. Young

Texas Tech University - Rawls College of Business

Date Written: July 5, 2019

Abstract

Constitutional scholars emphasize the importance of an enduring, stable constitutional order. North and Weingast (1989) argue that it consistent with credible commitments to sustainable fiscal policies. However, this view is controversial and has received little empirical study. We use nineteenth century US state-level data to estimate relationships between constitutional design and the likelihood of a government default. Results indicate that more entrenched and less specific constitutions are associated with a lower likelihood of default.

Keywords: Default, Debt, Fiscal Crisis, Constitutions, Credible Commitment, Entrenchment

JEL Classification: H12, H73, H74, N21

Suggested Citation

Dove, John A. and Young, Andrew T., US State Constitutional Entrenchment and Default in the Nineteenth Century (July 5, 2019). Journal of Institutional Economics (Forthcoming). Available at SSRN: https://ssrn.com/abstract=3299535 or http://dx.doi.org/10.2139/ssrn.3299535

John A. Dove

Troy University - Manuel H. Johnson Center for Political Economy ( email )

Bibb Graves Hall
Troy, AL 36082
United States

Andrew T. Young (Contact Author)

Texas Tech University - Rawls College of Business ( email )

Lubbock, TX 79409
United States

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