Political costs of sovereign default : examining the impact of a sovereign’s failure to repay its debt on popularity, 1984-2012

Fil: Smith, Julia. Universidad de San Andrés. Departamento de Ciencias Sociales; Argentina.

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Autor principal: Smith, Julia
Otros Autores: Mitchelstein, Eugenia
Formato: Tesis Tesis de maestría updatedVersion
Lenguaje:Inglés
Publicado: Universidad de San Andrés. Departamento de Ciencias Sociales 11/5
Acceso en línea:http://hdl.handle.net/10908/18859
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Repositorio Digital - Universidad de San Andrés (UdeSa) de Universidad de San Andrés
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spelling I37-R143-10908-188592025-01-29T16:33:15Z Political costs of sovereign default : examining the impact of a sovereign’s failure to repay its debt on popularity, 1984-2012 Smith, Julia Mitchelstein, Eugenia Fil: Smith, Julia. Universidad de San Andrés. Departamento de Ciencias Sociales; Argentina. This paper uses a popularity function to study the relationship between sovereign default and government popularity. I construct a dataset of default history for 55 sovereign entities from 1984-2012. By distinguishing between different types of default, I find that defaults on foreign-currency-denominated debt held by banks, and on foreign-currency-denominated commercial debt, are correlated with a drop in government popularity. On the other hand, there is no correlation between defaults on local-currency-denominated debt and changes in government approval. I accompany these findings with case studies to hypothesize that because governments typically have more policy options to manage local-currency debt, the population is more likely to view defaults on such debt as a pro-active policy choice to obtain a socially optimal outcome. Consequently, constituents do not punish politicians who make such a decision. Conversely, defaults on foreign-currency debt are more likely to occur under a government that has run out of policy options and is left with little choice but to stop servicing foreign currency debt. Voters do not view such an outcome favorably. These findings suggest that the theory that a government may “gamble for redemption,” or delay making a socially-optimal decision to default due to the fear of political fallout, is misguided. 11/5/2021 15:05Z 11/5/2021 15:05Z 2018-06 Tesis info:eu-repo/semantics/masterThesis info:ar-repo/semantics/tesis de maestría info:eu-repo/semantics/updatedVersion Smith, J. (2018). Political costs of sovereign default : examining the impact of a sovereign’s failure to repay its debt on popularity, 1984-2012. [Tesis de maestría, Universidad de San Andrés. Departamento de Ciencias Sociales]. Repositorio Digital San Andrés. http://hdl.handle.net/10908/18859 http://hdl.handle.net/10908/18859 eng info:eu-repo/semantics/openAccess https://creativecommons.org/licenses/by-nc-nd/4.0/ application/pdf application/pdf Universidad de San Andrés. Departamento de Ciencias Sociales
institution Universidad de San Andrés
institution_str I-37
repository_str R-143
collection Repositorio Digital - Universidad de San Andrés (UdeSa)
language Inglés
description Fil: Smith, Julia. Universidad de San Andrés. Departamento de Ciencias Sociales; Argentina.
author2 Mitchelstein, Eugenia
author_facet Mitchelstein, Eugenia
Smith, Julia
format Tesis
Tesis de maestría
Tesis de maestría
updatedVersion
author Smith, Julia
spellingShingle Smith, Julia
Political costs of sovereign default : examining the impact of a sovereign’s failure to repay its debt on popularity, 1984-2012
author_sort Smith, Julia
title Political costs of sovereign default : examining the impact of a sovereign’s failure to repay its debt on popularity, 1984-2012
title_short Political costs of sovereign default : examining the impact of a sovereign’s failure to repay its debt on popularity, 1984-2012
title_full Political costs of sovereign default : examining the impact of a sovereign’s failure to repay its debt on popularity, 1984-2012
title_fullStr Political costs of sovereign default : examining the impact of a sovereign’s failure to repay its debt on popularity, 1984-2012
title_full_unstemmed Political costs of sovereign default : examining the impact of a sovereign’s failure to repay its debt on popularity, 1984-2012
title_sort political costs of sovereign default : examining the impact of a sovereign’s failure to repay its debt on popularity, 1984-2012
publisher Universidad de San Andrés. Departamento de Ciencias Sociales
publishDate 11/5
url http://hdl.handle.net/10908/18859
work_keys_str_mv AT smithjulia politicalcostsofsovereigndefaultexaminingtheimpactofasovereignsfailuretorepayitsdebtonpopularity19842012
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