Social Polarization, Social Institutions, and Country Creditworthiness

The literature argues that the presence of multiple veto players (government decisionmakers) with polarized interests increases the credibility of sovereign commitments, but reduces the ability of governments to adjust policies in the event of exog...

Full description

Bibliographic Details
Main Authors:	Keefer, Philip, Knack, Stephen
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ABSOLUTE VALUE AGGREGATE INCOME AGRICULTURE ALTERNATIVE POLICIES ASSET INEQUALITY BUSINESS CYCLE CIVIL LIBERTIES COEFFICIENT ESTIMATES COLLECTIVE ACTION COMPETITIVENESS COUNTRY COVERAGE CRISES DEBT DEFICIT SPENDING DEMOCRACY DEMOCRATIC INSTITUTIONS DEPENDENT VARIABLE DEVELOPING COUNTRIES DISCOUNT RATES DISTRIBUTION OF INCOME ECONOMIC EXCHANGE ECONOMIC GROWTH ECONOMIC OUTCOMES ECONOMIC PERFORMANCE ECONOMIC POLICIES ECONOMIC POLICY EMPIRICAL WORK ENDOGENOUS VARIABLES ENFORCEABILITY ETHNIC DIVISIONS ETHNIC FRACTIONALIZATION ETHNIC GROUP ETHNIC GROUPS ETHNIC HOMOGENEITY ETHNIC POLARIZATION EXOGENOUS CHANGES EXOGENOUS SHOCKS EXTERNAL SHOCKS FREEDOM HOUSE GDP GINI COEFFICIENT GOVERNMENT DECISION MAKING HIGH INFLATION INCOME INCOME GROUPS INCOME GROWTH INCOME INEQUALITY INCOME INEQUALITY DATA INCOME LEVEL INCOME PER CAPITA INCOME TAXATION INEQUALITY COEFFICIENT INEQUALITY DATA INEQUALITY MEASURES INEQUALITY OBSERVATIONS INEQUALITY VARIABLES INSTITUTIONAL ARRANGEMENTS INSTITUTIONAL ENVIRONMENT INSTITUTIONAL VARIABLES INTEREST RATE INTEREST RATES INVESTMENT CLIMATE LAND INEQUALITY LAND OWNERSHIP LINGUISTIC FRACTIONALIZATION LINGUISTIC GROUP LINK BETWEEN INEQUALITY AND GROWTH LORENZ CURVE MEAN VALUE MEASUREMENT ERROR MEDIAN VOTER MEDIAN VOTERS MONETARY POLICY MORAL HAZARD NEGATIVE COEFFICIENT NEGATIVE EFFECT NEGATIVE RELATIONSHIP NET EFFECT OIL PARLIAMENT PER CAPITA INCOME POLARIZATION MEASURES POLICY DECISIONS POLICY MAKING POLICY RESEARCH POLITICAL CONDITIONS POLITICAL CONFLICT POLITICAL ECONOMY POLITICAL FREEDOMS POLITICAL INSTITUTIONS POLITICAL PARTIES POLITICAL SCIENCE POLITICAL SCIENCE LITERATURE POLITICAL SYSTEMS POLITICAL VIOLENCE POSITIVE EFFECT PRIME MINISTER PROPERTY RIGHTS REGRESSION ANALYSIS REVERSE CAUSATION SIGNIFICANT NEGATIVE SOCIAL CONFLICT SOCIAL POLARIZATION TERMS OF TRADE VETO POWER WEALTH POLITICAL INSTITUTIONS GOVERNMENT DECISION-MAKING CREDITWORTHINESS GOVERNMENT COMMITMENTS POLITICAL ENVIRONMENT ETHNIC CONFLICT SOCIAL BEHAVIOR SOCIAL CONFLICTS SOCIAL ISOLATION INCOME LEVELS SOCIOECONOMIC CONDITIONS WEALTH
Online Access:	http://documents.worldbank.org/curated/en/2002/10/2054538/social-polarization-social-institutions-country-creditworthiness http://hdl.handle.net/10986/19227

id	okr-10986-19227
recordtype	oai_dc
spelling	okr-10986-192272021-04-23T14:03:42Z Social Polarization, Social Institutions, and Country Creditworthiness Keefer, Philip Knack, Stephen ABSOLUTE VALUE AGGREGATE INCOME AGRICULTURE ALTERNATIVE POLICIES ASSET INEQUALITY BUSINESS CYCLE CIVIL LIBERTIES COEFFICIENT ESTIMATES COLLECTIVE ACTION COMPETITIVENESS COUNTRY COVERAGE CRISES DEBT DEFICIT SPENDING DEMOCRACY DEMOCRATIC INSTITUTIONS DEPENDENT VARIABLE DEVELOPING COUNTRIES DISCOUNT RATES DISTRIBUTION OF INCOME ECONOMIC EXCHANGE ECONOMIC GROWTH ECONOMIC OUTCOMES ECONOMIC PERFORMANCE ECONOMIC POLICIES ECONOMIC POLICY EMPIRICAL WORK ENDOGENOUS VARIABLES ENFORCEABILITY ETHNIC DIVISIONS ETHNIC FRACTIONALIZATION ETHNIC GROUP ETHNIC GROUPS ETHNIC HOMOGENEITY ETHNIC POLARIZATION EXOGENOUS CHANGES EXOGENOUS SHOCKS EXTERNAL SHOCKS FREEDOM HOUSE GDP GINI COEFFICIENT GOVERNMENT DECISION MAKING HIGH INFLATION INCOME INCOME GROUPS INCOME GROWTH INCOME INEQUALITY INCOME INEQUALITY DATA INCOME LEVEL INCOME PER CAPITA INCOME TAXATION INEQUALITY COEFFICIENT INEQUALITY DATA INEQUALITY MEASURES INEQUALITY OBSERVATIONS INEQUALITY VARIABLES INSTITUTIONAL ARRANGEMENTS INSTITUTIONAL ENVIRONMENT INSTITUTIONAL VARIABLES INTEREST RATE INTEREST RATES INVESTMENT CLIMATE LAND INEQUALITY LAND OWNERSHIP LINGUISTIC FRACTIONALIZATION LINGUISTIC GROUP LINK BETWEEN INEQUALITY AND GROWTH LORENZ CURVE MEAN VALUE MEASUREMENT ERROR MEDIAN VOTER MEDIAN VOTERS MONETARY POLICY MORAL HAZARD NEGATIVE COEFFICIENT NEGATIVE EFFECT NEGATIVE RELATIONSHIP NET EFFECT OIL PARLIAMENT PER CAPITA INCOME POLARIZATION MEASURES POLICY DECISIONS POLICY MAKING POLICY RESEARCH POLITICAL CONDITIONS POLITICAL CONFLICT POLITICAL ECONOMY POLITICAL FREEDOMS POLITICAL INSTITUTIONS POLITICAL PARTIES POLITICAL SCIENCE POLITICAL SCIENCE LITERATURE POLITICAL SYSTEMS POLITICAL VIOLENCE POSITIVE EFFECT PRIME MINISTER PROPERTY RIGHTS REGRESSION ANALYSIS REVERSE CAUSATION SIGNIFICANT NEGATIVE SOCIAL CONFLICT SOCIAL POLARIZATION TERMS OF TRADE VETO POWER WEALTH POLITICAL INSTITUTIONS GOVERNMENT DECISION-MAKING EXTERNAL SHOCKS CREDITWORTHINESS GOVERNMENT COMMITMENTS POLITICAL ENVIRONMENT ETHNIC CONFLICT SOCIAL BEHAVIOR SOCIAL CONFLICTS SOCIAL ISOLATION INCOME LEVELS SOCIOECONOMIC CONDITIONS POLITICAL INSTITUTIONS WEALTH The literature argues that the presence of multiple veto players (government decisionmakers) with polarized interests increases the credibility of sovereign commitments, but reduces the ability of governments to adjust policies in the event of exogenous shocks that jeopardize their ability to honor their commitments. In the case of sovereign lending, if the first effect prevails, countries would be regarded as more creditworthy; if the second, less. The authors address two issues. First, using measures of country creditworthiness, they ask whether the net effect of multiple veto players is positive or negative. Second, though, the authors go beyond the existing literature to argue that the net effect of multiple veto players depends on the nature of social polarization in a country. In particular, they argue that political competition is fundamentally different in countries exhibiting ethnic polarization than in countries polarized according to income or wealth. The evidence supports the prediction that multiple veto players matter more when countries are more ethnically polarized, but less when income inequality is greater. 2014-08-01T19:58:25Z 2014-08-01T19:58:25Z 2002-10 http://documents.worldbank.org/curated/en/2002/10/2054538/social-polarization-social-institutions-country-creditworthiness http://hdl.handle.net/10986/19227 English en_US Policy Research Working Paper;No. 2920 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ABSOLUTE VALUE AGGREGATE INCOME AGRICULTURE ALTERNATIVE POLICIES ASSET INEQUALITY BUSINESS CYCLE CIVIL LIBERTIES COEFFICIENT ESTIMATES COLLECTIVE ACTION COMPETITIVENESS COUNTRY COVERAGE CRISES DEBT DEFICIT SPENDING DEMOCRACY DEMOCRATIC INSTITUTIONS DEPENDENT VARIABLE DEVELOPING COUNTRIES DISCOUNT RATES DISTRIBUTION OF INCOME ECONOMIC EXCHANGE ECONOMIC GROWTH ECONOMIC OUTCOMES ECONOMIC PERFORMANCE ECONOMIC POLICIES ECONOMIC POLICY EMPIRICAL WORK ENDOGENOUS VARIABLES ENFORCEABILITY ETHNIC DIVISIONS ETHNIC FRACTIONALIZATION ETHNIC GROUP ETHNIC GROUPS ETHNIC HOMOGENEITY ETHNIC POLARIZATION EXOGENOUS CHANGES EXOGENOUS SHOCKS EXTERNAL SHOCKS FREEDOM HOUSE GDP GINI COEFFICIENT GOVERNMENT DECISION MAKING HIGH INFLATION INCOME INCOME GROUPS INCOME GROWTH INCOME INEQUALITY INCOME INEQUALITY DATA INCOME LEVEL INCOME PER CAPITA INCOME TAXATION INEQUALITY COEFFICIENT INEQUALITY DATA INEQUALITY MEASURES INEQUALITY OBSERVATIONS INEQUALITY VARIABLES INSTITUTIONAL ARRANGEMENTS INSTITUTIONAL ENVIRONMENT INSTITUTIONAL VARIABLES INTEREST RATE INTEREST RATES INVESTMENT CLIMATE LAND INEQUALITY LAND OWNERSHIP LINGUISTIC FRACTIONALIZATION LINGUISTIC GROUP LINK BETWEEN INEQUALITY AND GROWTH LORENZ CURVE MEAN VALUE MEASUREMENT ERROR MEDIAN VOTER MEDIAN VOTERS MONETARY POLICY MORAL HAZARD NEGATIVE COEFFICIENT NEGATIVE EFFECT NEGATIVE RELATIONSHIP NET EFFECT OIL PARLIAMENT PER CAPITA INCOME POLARIZATION MEASURES POLICY DECISIONS POLICY MAKING POLICY RESEARCH POLITICAL CONDITIONS POLITICAL CONFLICT POLITICAL ECONOMY POLITICAL FREEDOMS POLITICAL INSTITUTIONS POLITICAL PARTIES POLITICAL SCIENCE POLITICAL SCIENCE LITERATURE POLITICAL SYSTEMS POLITICAL VIOLENCE POSITIVE EFFECT PRIME MINISTER PROPERTY RIGHTS REGRESSION ANALYSIS REVERSE CAUSATION SIGNIFICANT NEGATIVE SOCIAL CONFLICT SOCIAL POLARIZATION TERMS OF TRADE VETO POWER WEALTH POLITICAL INSTITUTIONS GOVERNMENT DECISION-MAKING EXTERNAL SHOCKS CREDITWORTHINESS GOVERNMENT COMMITMENTS POLITICAL ENVIRONMENT ETHNIC CONFLICT SOCIAL BEHAVIOR SOCIAL CONFLICTS SOCIAL ISOLATION INCOME LEVELS SOCIOECONOMIC CONDITIONS POLITICAL INSTITUTIONS WEALTH
spellingShingle	ABSOLUTE VALUE AGGREGATE INCOME AGRICULTURE ALTERNATIVE POLICIES ASSET INEQUALITY BUSINESS CYCLE CIVIL LIBERTIES COEFFICIENT ESTIMATES COLLECTIVE ACTION COMPETITIVENESS COUNTRY COVERAGE CRISES DEBT DEFICIT SPENDING DEMOCRACY DEMOCRATIC INSTITUTIONS DEPENDENT VARIABLE DEVELOPING COUNTRIES DISCOUNT RATES DISTRIBUTION OF INCOME ECONOMIC EXCHANGE ECONOMIC GROWTH ECONOMIC OUTCOMES ECONOMIC PERFORMANCE ECONOMIC POLICIES ECONOMIC POLICY EMPIRICAL WORK ENDOGENOUS VARIABLES ENFORCEABILITY ETHNIC DIVISIONS ETHNIC FRACTIONALIZATION ETHNIC GROUP ETHNIC GROUPS ETHNIC HOMOGENEITY ETHNIC POLARIZATION EXOGENOUS CHANGES EXOGENOUS SHOCKS EXTERNAL SHOCKS FREEDOM HOUSE GDP GINI COEFFICIENT GOVERNMENT DECISION MAKING HIGH INFLATION INCOME INCOME GROUPS INCOME GROWTH INCOME INEQUALITY INCOME INEQUALITY DATA INCOME LEVEL INCOME PER CAPITA INCOME TAXATION INEQUALITY COEFFICIENT INEQUALITY DATA INEQUALITY MEASURES INEQUALITY OBSERVATIONS INEQUALITY VARIABLES INSTITUTIONAL ARRANGEMENTS INSTITUTIONAL ENVIRONMENT INSTITUTIONAL VARIABLES INTEREST RATE INTEREST RATES INVESTMENT CLIMATE LAND INEQUALITY LAND OWNERSHIP LINGUISTIC FRACTIONALIZATION LINGUISTIC GROUP LINK BETWEEN INEQUALITY AND GROWTH LORENZ CURVE MEAN VALUE MEASUREMENT ERROR MEDIAN VOTER MEDIAN VOTERS MONETARY POLICY MORAL HAZARD NEGATIVE COEFFICIENT NEGATIVE EFFECT NEGATIVE RELATIONSHIP NET EFFECT OIL PARLIAMENT PER CAPITA INCOME POLARIZATION MEASURES POLICY DECISIONS POLICY MAKING POLICY RESEARCH POLITICAL CONDITIONS POLITICAL CONFLICT POLITICAL ECONOMY POLITICAL FREEDOMS POLITICAL INSTITUTIONS POLITICAL PARTIES POLITICAL SCIENCE POLITICAL SCIENCE LITERATURE POLITICAL SYSTEMS POLITICAL VIOLENCE POSITIVE EFFECT PRIME MINISTER PROPERTY RIGHTS REGRESSION ANALYSIS REVERSE CAUSATION SIGNIFICANT NEGATIVE SOCIAL CONFLICT SOCIAL POLARIZATION TERMS OF TRADE VETO POWER WEALTH POLITICAL INSTITUTIONS GOVERNMENT DECISION-MAKING EXTERNAL SHOCKS CREDITWORTHINESS GOVERNMENT COMMITMENTS POLITICAL ENVIRONMENT ETHNIC CONFLICT SOCIAL BEHAVIOR SOCIAL CONFLICTS SOCIAL ISOLATION INCOME LEVELS SOCIOECONOMIC CONDITIONS POLITICAL INSTITUTIONS WEALTH Keefer, Philip Knack, Stephen Social Polarization, Social Institutions, and Country Creditworthiness
relation	Policy Research Working Paper;No. 2920
description	The literature argues that the presence of multiple veto players (government decisionmakers) with polarized interests increases the credibility of sovereign commitments, but reduces the ability of governments to adjust policies in the event of exogenous shocks that jeopardize their ability to honor their commitments. In the case of sovereign lending, if the first effect prevails, countries would be regarded as more creditworthy; if the second, less. The authors address two issues. First, using measures of country creditworthiness, they ask whether the net effect of multiple veto players is positive or negative. Second, though, the authors go beyond the existing literature to argue that the net effect of multiple veto players depends on the nature of social polarization in a country. In particular, they argue that political competition is fundamentally different in countries exhibiting ethnic polarization than in countries polarized according to income or wealth. The evidence supports the prediction that multiple veto players matter more when countries are more ethnically polarized, but less when income inequality is greater.
format	Publications & Research :: Policy Research Working Paper
author	Keefer, Philip Knack, Stephen
author_facet	Keefer, Philip Knack, Stephen
author_sort	Keefer, Philip
title	Social Polarization, Social Institutions, and Country Creditworthiness
title_short	Social Polarization, Social Institutions, and Country Creditworthiness
title_full	Social Polarization, Social Institutions, and Country Creditworthiness
title_fullStr	Social Polarization, Social Institutions, and Country Creditworthiness
title_full_unstemmed	Social Polarization, Social Institutions, and Country Creditworthiness
title_sort	social polarization, social institutions, and country creditworthiness
publisher	World Bank, Washington, DC
publishDate	2014
url	http://documents.worldbank.org/curated/en/2002/10/2054538/social-polarization-social-institutions-country-creditworthiness http://hdl.handle.net/10986/19227
_version_	1764439577822494720

Social Polarization, Social Institutions, and Country Creditworthiness

Similar Items