Role of Institutions (Qian)

Why do some countries default more often than others? The role of institutions by Rong Qian. This paper examines how a country’s weak institutions and polarized governnment can affect the likehood of its default on soverign debt. Simulations of the modekl show that more than half the cross-country variation in sovereign default frequencies can be explained by institutional quality and the degree of government polarization observed in the data.”