TY - JOUR
T1 - Finding the "democratic advantage" in sovereign bond ratings
T2 - The importance of strong courts, property rights protection, and the rule of law
AU - Biglaiser, Glen
AU - Staats, Joseph L.
PY - 2012/6/1
Y1 - 2012/6/1
N2 - Much scholarship in the political economy literature has investigated the influence of the democratic advantage on sovereign bond ratings by credit rating agencies (CRAs). Missing from earlier work, however, is inquiry into the effects on bond ratings of factors that lower political risk, such as adherence to the rule of law, the presence of a strong and independent judicial system, and protection of property rights. Using panel data for up to thirty-six developing countries from 1996 to 2006, we find that rule of law, strong and independent courts, and protection of property rights have significant positive effects on bond ratings. Policymakers wanting to obtain higher bond ratings and increased revenue from bond sales would do well to heed the message contained in these findings. ©
AB - Much scholarship in the political economy literature has investigated the influence of the democratic advantage on sovereign bond ratings by credit rating agencies (CRAs). Missing from earlier work, however, is inquiry into the effects on bond ratings of factors that lower political risk, such as adherence to the rule of law, the presence of a strong and independent judicial system, and protection of property rights. Using panel data for up to thirty-six developing countries from 1996 to 2006, we find that rule of law, strong and independent courts, and protection of property rights have significant positive effects on bond ratings. Policymakers wanting to obtain higher bond ratings and increased revenue from bond sales would do well to heed the message contained in these findings. ©
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U2 - 10.1017/S0020818312000185
DO - 10.1017/S0020818312000185
M3 - Article
AN - SCOPUS:84863968587
SN - 0020-8183
VL - 66
SP - 515
EP - 535
JO - International Organization
JF - International Organization
IS - 3
ER -