[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/cup/intorg/v57y2003i01p3-42_57.html
   My bibliography  Save this article

The Democratic Advantage: Institutional Foundations of Financial Power in International Competition

Author

Listed:
  • Schultz, Kenneth A.
  • Weingast, Barry R.
Abstract
Despite their presumed liabilities, institutions associated with democracy serve as a source of power in prolonged international competition by increasing the financial resources that states can bring to bear. The theory of sovereign debt suggests that a state's ability to raise money through public borrowing is enhanced when debtholders have mechanisms for sanctioning state leaders in the event of default. Institutions associated with liberal government provide such mechanisms. All other things being equal, states that possess these institutions enjoy superior access to credit and lower interest rates than do states in which the sovereign has more discretion to default unilaterally. Liberal states can not only raise more money from a given economic base but can also pursue tax-smoothing policies that minimize economic distortions. The ability to finance competition in a manner that is consistent with long-term economic growth generates a significant advantage in prolonged rivalries. These claims are explored by analyzing the Anglo-French rivalry (1688–1815) and the Cold War.

Suggested Citation

  • Schultz, Kenneth A. & Weingast, Barry R., 2003. "The Democratic Advantage: Institutional Foundations of Financial Power in International Competition," International Organization, Cambridge University Press, vol. 57(1), pages 3-42, January.
    • Handle: RePEc:cup:intorg:v:57:y:2003:i:01:p:3-42_57
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S0020818303571065/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:intorg:v:57:y:2003:i:01:p:3-42_57. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/ino .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.