Interests over institutions: political-economic constraints on public debt management in developing countries

Benjamin Cormier

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Some use the model of independent central banks to posit that independent Debt Management Offices (DMOs) can enhance public debt sustainability. This study argues this is unlikely in developing countries. Developing country DMOs have limited space to apolitically manage (a) debt levels and (b) borrowing strategies. A comparison of South Africa and Botswana, using in-depth interviews and primary sources, traces public debt processes to argue DMOs are unlikely to significantly affect the link between political interests and these two key public debt outcomes over time. This argument has three implications. First, it gives rise to questions about the role of institutions in the governance of public debt. Second, it adds to recent literature on developing country external borrowing preferences by highlighting ideological effects. Third, it reinforces the idea that political economy theories of the relationship between interests, institutions, and policy outcomes should vary by policy area and national income level.

JEL-codes: E6 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2021-11-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published in Governance, 4, November, 2021, 34(4), pp. 1167 - 1191. ISSN: 0952-1895

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:112595

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