Political consequences of consumer debt relief

Toke Aidt, Zareh Asatryan and Lusine Badalyan

No 22-049, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: We study consumer debt relief as a tool of distributive politics and ask if debt relief can influence elections. We utilize quasi-experimental variation generated by a very large debt relief program enacted in the Republic of Georgia by a private foundation that affected every sixth voter. We estimate that the program helped the incumbent candidate linked to the foundation win the 2018 Presidential election, and that its effects persisted into the next election. We show how economic power can translate into political power in polities with de jure competitive elections but with de facto weak accountability.

Keywords: Consumer debt relief; distributive politics; vote buying; elections (search for similar items in EconPapers)
JEL-codes: D72 E51 O10 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-pol and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:22049

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