@article{dbbe278a99a8482d8aa78122842615e8,
title = "Political Power and the Credibility of Government Debt",
abstract = "If political power and motives to invest in government bonds are positively correlated across voting groups, then a self-selection equilibrium can arise where the government's promise to repay its debt is credible. We illustrate this using a formal model where the alternative use of wealth is to acquire human capital. Journal of Economic Literature Classification Numbers: D72, E60, H63.",
author = "Avinash Dixit and John Londregan",
note = "Funding Information: 1We thank Rod Kiewiet and Torsten Persson for useful discussions, the referee for constructive suggestions, and the National Science Foundation for financial support. We are indebted to seminar participants at the University of Minnesota, especially V. V. Chari, Andrew Atkeson, and Beth Allen, for suggestions that led to substantial improvements in the model. Some of this work was done while Dixit was visiting the Institute for International Economic Studies, Stockholm, and he thanks its faculty and staff for their hospitality.",
year = "2000",
month = sep,
doi = "10.1006/jeth.2000.2684",
language = "English (US)",
volume = "94",
pages = "80--105",
journal = "Journal of Economic Theory",
issn = "0022-0531",
publisher = "Academic Press Inc.",
number = "1",
}