Who's the Boss? Political Leadership and Sovereign Debt Ratings

• In Event: IOs and Support for International Governance

Abstract

In this paper, we contend that markets' perceptions of countries' creditworthiness depends partially on the educational and professional backgrounds of their leaders. We offer an informational theory of country assessments that argues that Western-based employees of credit ratings agencies (CRAs), faced with a heterogeneous informational environment in which they rate creditworthiness, rely on implicit stereotypes when judging the political willingness of countries to service their debts. We test these claims with original data from the Technocratic and Educational Dataset (TED), which includes new granular information on over 1,700 heads of government.

Authors

• Thomas E. Flores, George Mason University

• Gabriella Lloyd, University of Maryland, College Park

• Irfan Nooruddin, Georgetown University