Polarization and Government Debt

Mickael Melki; Andrew Christopher Pickering

Polarization and Government Debt

Mickael Melki, Andrew Christopher Pickering

Economics

Research output: Working paper › Discussion paper

Abstract

When voters discount the future there is pressure on governments to increase debt. Governments are more able to resist this temptation if voters are polarized ideologically. Policy contrasts starkly with models of 'strategic debt' wherein debt is predicted to increase with polarization. Using time-varying polarization measures generated from ideology data from party manifestos we find a sizable and statistically significant negative association between ideological polarization and debt levels in OECD countries.

Original language	English
Place of Publication	York
Publisher	Department of Economics and Related Studies, University of York
Number of pages	41
Volume	14
Publication status	Published - 1 Jul 2014

Access to Document

http://ideas.repec.org/p/yor/yorken/14-10.html

Cite this

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