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Political regimes and sovereign credit risk in Europe, 1750–1913

Published online by Cambridge University Press:  01 April 2009

MARK DINCECCO
MARK DINCECCO*
Affiliation:
Department of Economics, IMT Lucca Institute for Advanced Studies, Piazza San Ponziano 6, Lucca, Italy, 55100, [email protected]
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Abstract

This article uses a new panel data set to perform a statistical analysis of political regimes and sovereign credit risk in Europe from 1750 to 1913. Old Regime polities 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 centralized and/or limited regimes were associated with significant improvements in credit risk relative to fragmented and absolutist ones. Structural break tests also reveal close relationships between major turning points in yield series and political transformations.

Type
Research Article
Information
European Review of Economic History , Volume 13 , Issue 1 , April 2009 , pp. 31 - 63
Copyright
Copyright © European Historical Economics Society 2009

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