The role of regime type in the political economy of foreign reserve accumulation

Jäger, Kai

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Document Type: Article
Year of publication: 2016
The title of a journal, publication series: European Journal of Political Economy
Volume: 44
Page range: 79-96
Place of publication: Amsterdam [u.a.]
Publishing house: Elsevier
ISSN: 0176-2680
Publication language: English
Institution: Außerfakultäre Einrichtungen > Mannheim Centre for European Social Research - Research Department B
Subject: 320 Political science
Abstract: Authoritarian regimes have surpassed democracies in foreign reserve accumulation since the Asian Financial Crisis. Two prominent institutionalist theories could explain this diverging trend in reserves: First, the political business cycle theory, suggesting that reserves are reduced before an election. Second, the veto player theory, implying that a high number of veto players increases the de facto independence of central bankers, who are reluctant to invest in reserves. A time-series cross-sectional analysis for up to 182 countries over the period 1990–2013 shows that democratic governments tend to reduce their reserves before elections. While veto players do not affect reserves directly, a high number of veto players tends to limit a political business cycle before an election. Elections and veto players do not have an influence in authoritarian regimes. Election cycles tend to explain why democracies have relatively fallen behind in a period of massive reserve accumulation.

Dieser Eintrag ist Teil der Universitätsbibliographie.

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