Suchergebnisse

Little is known about the political repercussions of banking crises despite the extensive literature on the link between economic performance and political outcomes. We develop a theory of how clarity of responsibility affects incumbent party survival patterns in 89 democracies between 1975 and 2005. Our results are robust to modeling strategies that include hazard models with shared frailties to account for country-specific factors that affect incumbent survival. We find that globalization weakens the accountability link between politicians and voters. Incumbents in countries with open capital accounts are much more likely to survive a banking crisis than incumbents in closed economies. We do not find conclusive evidence that divided governments or those with multiple veto players enjoy higher survival rates after banking crises; in fact, the opposite seems to be true. We conclude with a discussion of the paradoxical relationship that openness brings to incumbents: greater exposure to foreign shocks and reduced electoral punishment for banking crises.

Due to the demographic development, public pension systems in the European Union organized on a pay-as-you-go (PAYG) principle will be forced to either raise contribution rates or taxes, shorten future replacement rates, or enforce a combination of both. In this regard, two important issues have to be addressed: The first issue refers to the question of measuring the public pension liabilities of private households until today. The extent of these liabilities has an impact on the saving behaviour. The second issue refers to the consequences of the demographic development for future retirees and contributors and examines the sustainability of pension schemes by confronting the present value of future pension payments with the present value of future contributions.