Determinants of state long-term debt: The political market framework. Issue 3 (1st September 2018)

• Record Type: Journal Article
• Authors: Kim, Koomin; Lim, Seunghoo
• Is Part Of: Social science journal. Volume 55:Issue 3(2018)
• Page Start: 359
• Page End: 368
• Publication Date: 2018-09-01
• Subjects: State long-term debt -- Political market framework -- Political institutions -- Fiscal institutions -- Interactive effects; Social sciences -- Periodicals; 300.5
• DOI: 10.1016/j.soscij.2017.11.002
• Languages: English
• ISSNs: 0362-3319

Abstract

Abstract: Because it focuses on the moderating role of political institutions – which emphasize equilibrium policy outcomes under different institutional arrangements derived from the interaction of policy supply and demand – the political market framework provides useful insights for analyzing the determinants of state long-term debt. Thus, different types of state political institutions should affect the degree of long-term debt in terms of specific demands and supply. Despite the numerous studies that have either applied the political market approach to local governments in policy areas or have analyzed the determinants of long-term debt from only a financial management perspective, few studies have applied the political market framework to state governments. Thus, adopting a state financial management perspective and conducting a panel data analysis using state data from 1980 to 2014, this study identifies the reasons why state governments act on long-term obligations in terms of the political market framework. This study also aims to expand the application of the political market framework to state governments and to integrate determinants of state long-term indebtedness.