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

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collection.link.5
https://openknowledge.worldbank.org/handle/10986/9
collection.name.5
Policy Research Working Papers
dc.contributor.author
Hanusch, Marek
dc.contributor.author
Vaaler, Paul M.
dc.date.accessioned
2013-04-12T16:55:50Z
dc.date.available
2013-04-12T16:55:50Z
dc.date.issued
2013-03
dc.date.lastModified
2021-04-23T14:03:07Z
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
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.googlescholar.linkpresent
yes
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

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