Democratization’s Risk Premium: Partisan and Opportunistic Political Business Cycle Effects on Sovereign Ratings in Developing Countries

We use partisan and opportunistic political business cycle (“PBC”) considerations to develop a framework for explaining election-period decisions by credit rating agencies (“agencies”) publishing developing country sovereign risk-ratings (“ratings”). We test six hypotheses derived from the framework with 482 agency ratings for 19 countries holding 39 presidential elections from 1987-2000. We find that ratings are linked to the partisan orientation of incumbents facing election and to expectations of incumbent victory. Consistent with the framework, rating effects are sometimes greater for right-wing compared to left-wing incumbents, perhaps, because partisan PBC considerations with right-wing (left-wing) incumbents reinforce (counteract) opportunistic PBC considerations.economics, elections, developing countries, ratings

Democratization’s Risk Premium: Partisan and Opportunistic Political Business Cycle Effects on Sovereign Ratings in Developing Countries

We use partisan and opportunistic political business cycle (“PBC”) considerations to develop a framework for explaining election-period decisions by credit rating agencies (“agencies”) publishing developing country sovereign risk-ratings (“ratings”). We test six hypotheses derived from the framework with 482 agency ratings for 19 countries holding 39 presidential elections from 1987-2000. We find that ratings are linked to the partisan orientation of incumbents facing election and to expectations of incumbent victory. Consistent with the framework, rating effects are sometimes greater for right-wing compared to left-wing incumbents, perhaps, because partisan PBC considerations with right-wing (left-wing) incumbents reinforce (counteract) opportunistic PBC considerations.http://deepblue.lib.umich.edu/bitstream/2027.42/39931/3/wp546.pd

DEMOCRACY’S SPREAD: Elections and Sovereign Debt in Developing Countries

We use partisan and opportunistic political business cycle (“PBC”) considerations to develop and test a framework for explaining election-period changes in credit spreads for developing country sovereign bonds. Pre-election bond spread trends are significantly linked both to the partisan orientation of incumbents facing election and to expectations of incumbent victory. Bond spreads for right-wing (leftwing) incumbents increase (decrease) as the likelihood of left-wing (right-wing) challenger victory increases. For right-wing incumbent partisan and opportunistic PBC effects bondholder risk perceptions are mutually reinforcing. For left-wing incumbents partisan PBC effects dominate bondholder risk perceptions compared to opportunistic PBC effects.http://deepblue.lib.umich.edu/bitstream/2027.42/39961/3/wp575.pd

少数规则：国家所有权和外国直接投资风险消减策略

企业研究人员、高管以及监管部门可能认为企业中的国家所有权引起了私人投资的风险。毕竟，私人投资是追求利润而政府是谋求福利的。都给予它们股权只会混淆投资项目的目标，使投资项目经理的工作复杂化并且使投资项目失败的总体风险增加。但是，这些假设都不符合已在几十个国家的数百个投资项目中得到证实的一个著名的风险观测指标：我们发现，在初始投资方面容易受到东道国政府重新谈判的国家，东道国所进行的非控股的但仍然实力雄厚的股权投资这一“少数规则”能够起到消减风险的作用

Minority rules: State ownership and foreign direct investment risk mitigation strategy

In countries where policies protecting private investor rights are more susceptible to change, substantial minority state ownership in a project can substantially decrease overall investment project risk. Sometimes, some state ownership in a project is just the thing to keep the state from changing important terms in the original agreement to the detriment of private co-investors

The Price of Empire: Unrest Location and Sovereign Risk in Tsarist Russia

Research on politically motivated unrest and sovereign risk overlooks whether and how unrest location matters for sovereign risk in geographically extensive states. Intuitively, political violence in the capital or nearby would seem to directly threaten the state's ability to pay its debts. However, it is possible that the effect on a government could be more pronounced the farther away the violence is, connected to the longer-term costs of suppressing rebellion. We use Tsarist Russia to assess these differences in risk effects when unrest occurs in Russian homeland territories versus more remote imperial territories. Our analysis of unrest events across the Russian imperium from 1820 to 1914 suggests that unrest increases risk more in imperial territories. Echoing current events, we find that unrest in Ukraine increases risk most. The price of empire included higher costs in projecting force to repress unrest and retain the confidence of the foreign investors financing those costs.Comment: 13 Tables, 8 Figure

Bridging Alone: Religious Conservatism, Marital Homogamy, and Voluntary Association Membership

This study characterizes social insularity of religiously conservative American married couples by examining patterns of voluntary associationmembership. Constructing a dataset of 3938 marital dyads from the second wave of the National Survey of Families and Households, the author investigates whether conservative religious homogamy encourages membership in religious voluntary groups and discourages membership in secular voluntary groups. Results indicate that couples’ shared affiliation with conservative denominations, paired with beliefs in biblical authority and inerrancy, increases the likelihood of religious group membership for husbands and wives and reduces the likelihood of secular group membership for wives, but not for husbands. The social insularity of conservative religious groups appears to be reinforced by homogamy—particularly by wives who share faith with husbands

Gerschenkron revisited: The new corporate Russia

© 2015, Journal of Economic Issues / Association for Evolutionary Economics. Our analysis is based on firm-specific data compiled from the Russian Trading System stock exchange and SKRIN (CKP-H in Russian) database. We seek to identify the factors behind Russias dramatically improved corporate sector performance from the beginning of the 2000s to December 2007. We argue that improved long-term corporate performance was a consequence of several policy initiatives associated with the state-dominated banking sector, which enabled statesubsidized investment funds to be channeled from a structurally reengineered energy sector to targeted investment projects located in other industries. We claim that Russias industrial strategy closely conforms to Alexander Gerschenkrons catch-up theory