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