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The Political Economy of Fiscal Prudence in Historical Perspective

Dincecco, Mark The Political Economy of Fiscal Prudence in Historical Perspective. Economics & Politics, 22 (1). pp. 1-36. ISSN 0954-1985 (2010)

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This paper uses a new panel dataset to perform a statistical analysis of political regimes and financial rectitude over the long run. Old Regime polities in Europe 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 political transformations toward centralized and limited regimes led to significant improvements in fiscal prudence. Dynamic estimations and structural breaks tests reinforce these findings. The results suggest that good financial housekeeping is one mechanism through which political reforms reduce sovereign credit risk.

Item Type: Article
Identification Number: 10.1111/j.1468-0343.2009.00349.x
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HJ Public Finance
J Political Science > JN Political institutions (Europe)
Research Area: Economics and Institutional Change
Depositing User: Users 18 not found.
Date Deposited: 07 Feb 2011 11:25
Last Modified: 29 Sep 2011 13:46
URI: http://eprints.imtlucca.it/id/eprint/17

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