Publication:
Credit Rating Agencies in Emerging Democracies : Guardians of Fiscal Discipline?

dc.contributor.author Hanusch, Marek
dc.contributor.author Vaaler, Paul M.
dc.contributor.author Hanusch, Marek
dc.date.accessioned 2013-04-12T16:55:50Z
dc.date.available 2013-04-12T16:55:50Z
dc.date.issued 2013-03
dc.description.abstract Credit rating agencies have drawn criticism for failing to anticipate and deter root causes of the 2008-2009 financial crisis in the United States. However, this paper presents evidence that credit rating agencies regularly anticipate and deter governments in emerging democracies from opportunistic borrowing and potential financial crises related to elections and the political budget cycle behavior they encourage. The paper considers a sample of 18 such countries holding 32 presidential elections from 1989 to 2004. The analysis shows that credit rating agencies induced greater fiscal discipline during election periods when governments had incentives to borrow opportunistically for short-term electoral gain. Countries with higher credit rating agency sovereign ratings borrowed less than lower-rated countries in election periods, but borrowed more in non-election periods. Credit rating agencies promoted fiscal discipline during increasingly frequent election periods in emerging democracies. en
dc.identifier http://documents.worldbank.org/curated/en/2013/03/17408765/credit-rating-agencies-emerging-democracies-guardians-fiscal-discipline
dc.identifier.uri http://hdl.handle.net/10986/13180
dc.language English
dc.language.iso en_US
dc.publisher World Bank, Washington, DC
dc.relation.ispartofseries Policy Research Working Paper;No. 6379
dc.rights CC BY 3.0 IGO
dc.rights.holder World Bank
dc.rights.uri http://creativecommons.org/licenses/by/3.0/igo/
dc.subject ACCESS TO CREDIT
dc.subject ACCOUNTING
dc.subject BOND ISSUANCES
dc.subject BOND SPREADS
dc.subject BORROWER
dc.subject BUDGET BALANCE
dc.subject BUDGET BALANCES
dc.subject BUDGET CYCLE
dc.subject BUDGET SURPLUSES
dc.subject BUSINESS CYCLE
dc.subject BUSINESS CYCLES
dc.subject CENTRAL BANKS
dc.subject CHECKS
dc.subject CIVIL LIBERTIES
dc.subject CREDIT HISTORIES
dc.subject CREDIT RATING
dc.subject CREDIT RATING AGENCIES
dc.subject CREDIT RATING AGENCY
dc.subject CREDITWORTHINESS
dc.subject CURRENCY
dc.subject CURRENCY CRISIS
dc.subject DEBT
dc.subject DEMOCRACY
dc.subject DEPENDENT
dc.subject DEVELOPING COUNTRIES
dc.subject DOMINANT PARTY
dc.subject ELECTION
dc.subject ELECTIONS
dc.subject ELECTORAL SYSTEM
dc.subject ELECTORAL SYSTEMS
dc.subject EMERGING DEMOCRACIES
dc.subject FINANCIAL CRISES
dc.subject FINANCIAL CRISIS
dc.subject FINANCIAL MARKET
dc.subject FINANCIAL SERVICES
dc.subject FISCAL DEFICIT
dc.subject FISCAL DISCIPLINE
dc.subject FISCAL POLICY
dc.subject FORBEARANCE
dc.subject FUTURE CREDIT
dc.subject GOVERNMENT BORROWING
dc.subject GOVERNMENT BUDGET
dc.subject GOVERNMENT FINANCES
dc.subject HOLDING
dc.subject INDIVIDUAL BOND
dc.subject INFLATION
dc.subject INFLATION RATE
dc.subject INSTRUMENT
dc.subject INTERNATIONAL AGREEMENTS
dc.subject INTERNATIONAL BANK
dc.subject INVESTMENT DECISIONS
dc.subject LOCAL CURRENCY
dc.subject MARKET PLAYERS
dc.subject MARKET SHARES
dc.subject MONETARY FUND
dc.subject MORTGAGES
dc.subject PENSION
dc.subject PENSION FUNDS
dc.subject POLICY ENVIRONMENT
dc.subject POLITICAL BUSINESS CYCLE
dc.subject POLITICAL BUSINESS CYCLES
dc.subject POLITICAL ECONOMY
dc.subject POLITICAL INSTITUTIONS
dc.subject POLITICAL PARTIES
dc.subject POLITICAL RIGHTS
dc.subject PRESIDENTIAL ELECTIONS
dc.subject REPUDIATION
dc.subject RESERVES
dc.subject SOVEREIGN BOND
dc.subject SOVEREIGN RATING
dc.subject SOVEREIGN RATINGS
dc.subject SOVEREIGN RISK
dc.subject UNEMPLOYMENT RATE
dc.subject WORLD DEVELOPMENT INDICATORS
dc.title Credit Rating Agencies in Emerging Democracies : Guardians of Fiscal Discipline? en
dspace.entity.type Publication
okr.date.disclosure 2013-03-01
okr.doctype Publications & Research :: Policy Research Working Paper
okr.doctype Publications & Research
okr.docurl http://documents.worldbank.org/curated/en/2013/03/17408765/credit-rating-agencies-emerging-democracies-guardians-fiscal-discipline
okr.globalpractice Finance and Markets
okr.globalpractice Governance
okr.globalpractice Trade and Competitiveness
okr.identifier.doi 10.1596/1813-9450-6379
okr.identifier.externaldocumentum 000158349_20130304152520
okr.identifier.internaldocumentum 17408765
okr.identifier.report WPS6379
okr.language.supported en
okr.pdfurl http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/03/04/000158349_20130304152520/Rendered/PDF/wps6379.pdf en
okr.region.geographical Africa
okr.topic Finance and Financial Sector Development :: Debt Markets
okr.topic Governance :: Parliamentary Government
okr.topic Private Sector Development :: Emerging Markets
okr.topic Finance and Financial Sector Development :: Bankruptcy and Resolution of Financial Distress
okr.unit Development Research Group (DECRG)
okr.volume 1 of 1
relation.isAuthorOfPublication e8191634-f6b7-4f49-928b-f42b51d2c37f
relation.isSeriesOfPublication 26e071dc-b0bf-409c-b982-df2970295c87
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