International Commodity Price Shocks, Democracy, and External Debt
IMF Working Papers, March 1, 2010
Source details
- Canonical URL
- International Commodity Price Shocks, Democracy, and External Debt
Other formats
Bibliographic details
- Authors: Markus Bruckner, Rabah Arezki
- Published: March 1, 2010
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451963427.001
Summary of study
- Sample: panel data for a world sample of 93 countries spanning the period 1970-2007.
- Main finding: positive commodity price shocks lead to a significant reduction in the level of external debt in democracies, but to no significant reduction in the level of external debt in autocracies.
Empirical findings
- External debt response:
- Democracies: positive commodity price shocks → significant reduction in the level of external debt.
- Autocracies: positive commodity price shocks → no significant reduction in the level of external debt.
- Government expenditures:
- Autocracies: positive commodity price shocks lead to a statistically significant and quantitatively large increase in total government expenditures.
- Democracies: government expenditures did not increase significantly following positive commodity price shocks.
- Default risk on external debt:
- Democracies: following positive windfalls from international commodity price shocks, the risk of default on external debt decreased.
- Autocracies: following positive windfalls, the risk of default on external debt increased significantly.
Content in this bundle
- _wp1053 - References