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Sovereign credit and political survival in democracies

  • Matthew DiGiuseppe and Patrick E. Shea

Models of distributive politics often assume that fixed budgets constrain the efforts of incumbents to retain power. Yet, significant variation exists in politicians' abilities to push distributive costs forward by funding current fiscal policy through sovereign borrowing. This article theorizes how and when variation in sovereign credit access influences the central goal of democratic incumbents: political survival. Credit allows incumbents to reward supporters without immediately extracting domestic revenue. Excessive borrowing, however, risks higher interest rates or possible market exclusion. Considering sovereign borrowing's benefits and costs, we argue that the marginal effect of credit access on political survival is greatest for those incumbents that require other parties to implement fiscal policy. An analysis of incumbent party tenure in seventy-one democracies from 1977–2007 demonstrates that affordable sovereign finance is associated with longer tenures under divided government but has no significant effect on survival under unified governments.

Corresponding author
Corresponding author: Matthew DiGiuseppe,Assistant Professor Department of Political Science, University of Mississippi, 237 Dupree Hall, Oxford, MS. Email:
Patrick E. Shea, Assistant Professor, Department of Political Science, University of Houston, 447 Guthrie Hoffman Hall, Houston, Texas 77204. Email:
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