War, Moral Hazard, and Ministerial Responsibility: England After the Glorious Revolution

Cox, Gary W.

doi:10.1017/s0022050711000052

Cited by 60 publications

(27 citation statements)

References 31 publications

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“…A similar argument has been made for England before the Glorious Revolution. Gary Cox (2011) concludes that defaults there constituted the equivalent of insurance claims coming due.…”

Section: Discussionmentioning

confidence: 99%

Risk Sharing with the Monarch: Contingent Debt and Excusable Defaults in the Age of Philip II, 1556-1598

Drelichman

Voth

2011

SSRN Journal

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Contingent sovereign debt can create important welfare gains. Nonetheless, there is almost no issuance today. Using hand-collected archival data, we examine the first known case of large-scale use of state-contingent sovereign debt in history. Philip II of Spain entered into hundreds of contracts whose value and due date depended on verifiable, exogenous events such as the arrival of silver fleets. We show that this allowed for effective risk-sharing between the king and his bankers. The existence of statecontingent debt also sheds light on the nature of defaults -they were simply contingencies over which Crown and bankers had not contracted previously. * We are grateful to

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“…A similar argument has been made for England before the Glorious Revolution. Gary Cox (2011) concludes that defaults there constituted the equivalent of insurance claims coming due.…”

Section: Discussionmentioning

confidence: 99%

Risk Sharing with the Monarch: Contingent Debt and Excusable Defaults in the Age of Philip II, 1556-1598

Drelichman

Voth

2011

SSRN Journal

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“…Hoffman and Rosenthal (1997) argue that the one true goal of absolutist monarchs was to wage war for personal glory and for homeland defense. A key reason was the problem of royal moral hazard in warfare (Cox, 2011). In Hoffman's (2009, p. 24) words, monarchs overspent on the military and provided more defense than their citizens likely desired.…”

Section: Limited Governmentmentioning

confidence: 99%

State Capacity and Long-Run Performance

Dincecco

Katz

2012

SSRN Journal

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We present new evidence about the long-term links between state capacity and economic performance. Our database is novel and spans 11 countries and 4 centuries in Europe, the birthplace of modern economic growth. Using standard panel data methods, we find that the performance impacts of states with modern extractive and productive capabilities are significant, large, and robust to a wide variety of specifications, controls, and modeling techniques. AbstractWe present new evidence about the long-term links between state capacity and economic performance. Our database is novel and spans 11 countries and 4 centuries in Europe, the birthplace of modern economic growth. Using standard panel data methods, we find that the performance impacts of states with modern extractive and productive capabilities are significant, large, and robust to a wide variety of specifications, controls, and modeling techniques.

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“…Although in "normal times" autocrats often respond to urban pressure FIGURE 1. Proportion of country-years spent in default, by regime type related historical literature on institutional changes that led to improved borrowing rates for European states; see Cox 2011b andNorth and Weingast 1989;Dincecco 2011;andStasavage 2010 and 3. Reinhart and Rogoff 2009.…”

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confidence: 99%

“…Note, however, that Oatley 2010 finds that autocracies appear to have taken on more foreign debt than democracies. See also the discussion of borrowing rates across regimes in Cox 2011a. by providing food cheaply to consumers, during times of fiscal crisis such food provision programs may prove too costly to continue. Thus, autocrats may be forced to choose between reducing food subsidies to remain faithful on debt repayment, or defaulting on obligations to international lenders to appease urban citizens threatening revolt in the face of rising food prices.…”

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confidence: 99%

Hungry for Change: Urban Bias and Autocratic Sovereign Default

Ballard-Rosa¹

2016

Int Org

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What drives autocrats to default on their sovereign debt? This article develops the first theory of sovereign debt default in autocracies that explicitly investigates survival incentives of political actors in nondemocracies. Self-interested elites, fearful of threats to their tenure because of urban unrest, may be willing to endure the long-term borrowing costs that defaulting creates rather than risk the short-term survival costs of removing cheap food policies for urban consumers. I test my main claims that both urbanization and food imports should be associated with greater likelihood of autocratic default using panel data covering forty-three countries over fifty years, finding that autocracies that are more reliant on imported food and that are more urbanized are significantly more likely to be in default on their external sovereign debt. I emphasize the regimecontingent nature of these effects by demonstrating that they are reversed when considering democratic sovereign default. I also substantiate the mechanisms put forward in my theory through illustrative historical cases of sovereign debt default in Zambia and Peru, in which I demonstrate that fear of urban unrest in the face of rapidly increasing food prices did indeed drive autocratic elites to default on international debt obligations. In addition to providing the first political theory of debt default in autocracies, the article introduces two robust predictors of autocratic default that have been overlooked in previous work, and highlights the importance of urban-rural dynamics in nondemocratic regimes.Fiscal crises across the globe have moved questions about the causes of sovereign debt default to the forefront of both theoretical and practical economic importance. Although there exists a well-developed body of research on the economic causes and consequences of default, work considering default as a strategic choice by political actors is still largely undeveloped. 1 Nowhere is this more obvious than in nondemocracies facing fiscal crisis: although more than half of all default cases in the past fifty years have occurred in autocracies, essentially all political theories of debt default focus solely on the democratic setting. 2 This lack of emphasis on

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War, Moral Hazard, and Ministerial Responsibility: England After the Glorious Revolution

Cited by 60 publications

References 31 publications

Risk Sharing with the Monarch: Contingent Debt and Excusable Defaults in the Age of Philip II, 1556-1598

Risk Sharing with the Monarch: Contingent Debt and Excusable Defaults in the Age of Philip II, 1556-1598

State Capacity and Long-Run Performance

Hungry for Change: Urban Bias and Autocratic Sovereign Default

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