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US State constitutional entrenchment and default in the 19th century

Published online by Cambridge University Press:  07 August 2019

John A. Dove  and
Andrew T. Young
John A. Dove
Affiliation:
Manuel H. Johnson Center for Political Economy, Troy University, Troy, AL USA 36082
Andrew T. Young*
Affiliation:
Rawls College of Business, Texas Tech University, Lubbock, TX USA 79409
*
*Corresponding author. Email: [email protected]
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Abstract

Constitutional scholars emphasize the importance of an enduring, stable constitutional order, which North and Weingast (1989) argue is consistent with credible commitments to sustainable fiscal policies. However, this view is controversial and has received little empirical study. We use 19th-century US state-level data to estimate relationships between constitutional design and the likelihood of a government default. Results indicate that more entrenched and less specific constitutions are associated with a lower likelihood of default.

Keywords

Defaultdebtfiscal crisisconstitutionscredible commitmententrenchment
Type
Research Article
Information
Journal of Institutional Economics , Volume 15 , Issue 6 , December 2019 , pp. 963 - 982
Copyright
Copyright © Millennium Economics Ltd 2019 

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