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Polarization and Government Debt
Research output: Working paper › Discussion paper
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Publication details
| Date | Published - 1 Jul 2014 |
|---|---|
| Publisher | Department of Economics and Related Studies, University of York |
| Place of Publication | York |
| Number of pages | 41 |
| Volume | 14 |
| Original language | English |
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.
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