Ever wonder what influence a country's credit rating has on budgeting and spending policy? Or why do certain regimes choose to invest in long term projects, and others in short term gains?
This months Friday research forum, with Paul Vaaler, will address just that. Vaaler, and co-author Marek Hanusch use existing theories on election cycles, credit agency ratings and borrowing/spending tendencies to explore their interactions in their paper Saving Politicians from Themselves?: How Credit Rating Agencies Constrain Political Budget Cycles in Developing Democracies. By exploring budget balance and sovereign credit rating relationships for 18 developing democracies holding 41 presidential elections over 17 years, Vaaler and Hanusch conclude that private agency credit ratings constrain national politicians who might otherwise engage in excessive borrowing.
Come Friday to discuss these leadership choices, and the influence of independent credit ratings on spending policy decisions.
All Friday Research Forums are held from 11:30-1pm in Room 123 of the Science Teaching and Student Services Building. Please RSVP here. Lunch will be provided.