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 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.

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Bibliographic Details
Main Authors: Keefer, Philip, Knack, Stephen
Language:English
en_US
Published: World Bank, Washington, DC 2002-10
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
https://hdl.handle.net/10986/19227
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spelling dig-okr-10986192272024-08-08T17:50:26Z 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 https://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/ application/pdf text/plain World Bank, Washington, DC
institution Banco Mundial
collection DSpace
country Estados Unidos
countrycode US
component Bibliográfico
access En linea
databasecode dig-okr
tag biblioteca
region America del Norte
libraryname Biblioteca del Banco Mundial
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
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
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
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.
topic_facet 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
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 2002-10
url http://documents.worldbank.org/curated/en/2002/10/2054538/social-polarization-social-institutions-country-creditworthiness
https://hdl.handle.net/10986/19227
work_keys_str_mv AT keeferphilip socialpolarizationsocialinstitutionsandcountrycreditworthiness
AT knackstephen socialpolarizationsocialinstitutionsandcountrycreditworthiness
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