2024-03-28T22:27:57
114294
Thu Mar 28 22:27:58 EDT 2024
Replication data for: Resolving Debt Overhang: Political Constraints in the Aftermath of Financial Crises
Atif Mian
Amir Sufi
Francesco Trebbi
114294
https://doi.org/10.3886/E114294V1
Countries become more politically polarized and fractionalized following
financial crises, reducing the likelihood of major financial reforms precisely when they might have especially large benefits. The evidence from a large sample of countries provides strong support for the hypotheses that following a financial crisis, voters become more ideologically extreme and ruling coalitions become weaker, independently of whether they were initially in power. The evidence that
increased polarization and weaker governments reduce the chances of financial reform and that financial crises lead to legislative gridlock and anemic reform is less clear-cut. The US debt overhang resolution is discussed as an illustration.
D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
E32 Business Fluctuations; Cycles
E44 Financial Markets and the Macroeconomy
G01 Financial Crises
H63 National Debt; Debt Management; Sovereign Debt