Does public debt matter for human capital development? Evidence from Nigeria

An inquiry into the impact of external and domestic borrowings is considered timely for Nigeria, given the growing public debt profile amid deteriorating human capital development. Using data from 1990 to 2021, the study estimates the effects of domestic and external debts on Nigeria's human capital development. The study employed the fully modified ordinary least squares and canonical cointegration regression as the main estimation technique and the robustness check, respectively. The study discovered that domestic and external debt, economic growth and debt servicing exert positive and significant influence on human capital development in Nigeria while environmental pollution has an inverse and significant impact on human capital development in Nigeria. Premised on the outcomes, policy suggestions aimed at enhancing human capital development in Nigeria have been put forward.     

Debt intolerance and the 90 per cent debt threshold: two impossibility theorems

Abstract

Two propositions underpin the retreat from post-crisis fiscal expansion instituted by several G7 governments in the summer of 2010. One is that the threat of debt intolerance is general: the reasoning is that the sharp rise in government debt levels caused by post-crisis fiscal expansion will force investors to abandon government bonds in favour of some other asset class. The other proposition is that there is a one-size debt threshold: the reasoning is that no government, those of the G7 countries included, can escape the serious consequences of debt intolerance and the threat of exit should its debt to GDP ratio reach 90 per cent. This paper argues that neither of these propositions can have credibility at a time of continuing global economic slowdown and consequent contraction in the global supplies of investable assets. At such a time investors cannot possibly hold up the threat of intolerance to core economy governments because they have no choice but to store substantial portions of their wealth in the latter's bonds, a fact which in turn means that the debt thresholds for core economy governments cannot possibly be the same as the average for other governments.     

我国国情规模浅析

本以一些常用的指标对我国的国债规模进行衡量，并对可能出现的潜在国债加以分析，说明我国目前国债规模确实存在风险，认为只有通过体制改革才能从根本上化解由此引发的财政风险。     

Serial payers,serial losers? The political economy of Argentina’s public debt

A global neoliberal architecture has enabled many countries to increase their public debts to meet their fiscal needs. But since 2008 a number of European and North American economies have faced financial crises induced by unsustainable debts. This paper analyses the case of post-default Argentina since 2001, so as to better comprehend the political economy of public debt, especially in cases where governments are elected on anti-austerity platforms. Presidents Néstor and Cristina Kirchner were committed to a debt-reduction policy, yet Argentina faced a new, ‘selective’, default in 2014. This paper analyses how the country has been trapped in a cycle of debt dependency, which can only be interrupted by a comprehensive audit of the debt’s legitimacy followed by debt cancellation. Critical lessons are provided for other countries facing similar situations.     

Deep finance: sovereign debt crises and the secondary market ‘fix’

Links between ballooning national debts and official aid conditionalities are well understood. Private sovereign debt markets, in contrast, have been largely overlooked outside mainstream economics. Yet, since the 1980s, a ‘secondary market regime’ in sovereign bonds has transformed financial geographies and legal practices, facilitating the build-up of riskier sovereign debts and strengthening specialized distressed debt investors. This secondary market ‘fix’ has enabled the international financial system to muddle through successive crises. Using the recently concluded Argentine debt saga as an example, I show how the secondary market regime’s effects on debtors are intertwined with, but distinct from, those of structural adjustment programmes; in cases of resistance to neoliberalism, ‘deep’ secondary market debt structures serve to push countries (back) into the neoliberal fold.     

Collateral Damage: The Impact of Mortgage Debt on U.S. Savings

This article contributes to the literature on saving by empirically investigating the determinants of the saving rate in the United States, with a special focus on the role of mortgage debt. Using data from 1987 to 2013, we find that mortgage payments have a substantial negative impact on both personal and private saving rates in the United States. An increase of 10 percentage points in mortgage payments leads to a 9.1-percentage-point drop in the personal saving rate and a 12.4-percentage-point drop in the private saving rate. In addition, including mortgage debt as an explanatory variable leads to significant changes in the impact of other variables, which further reinforces our claim that mortgage debt is important for the analysis of the saving rate. Comparing mortgage payments with nonmortgage consumer debt payments, we find that mortgage payments have a larger impact on the private saving rate whereas nonmortgage consumer debt payments have a larger impact on the personal saving rate. We also find a partial but robust crowding-out effect of public saving rate on the two saving rates. Our results have implications for monetary policy and government policies that encourage mortgage borrowing.     

Higher Education and the Referendum on Scottish Independence

During the course of the referendum campaign, the Scottish government argued that free tuition for Scottish and EU students symbolised Scotland's preference for universal services and was intrinsically fairer than the ‘marketised’ systems operating in the rest of the UK. Invoking principles of both social justice and pragmatism, three distinct critiques of the Scottish government's higher education policy were mounted and adopted by different policy actors for different political purposes. Following a discussion of these arguments, this article concludes that a more nuanced discussion of higher education policy in Scotland is required, focusing not just on the absence of tuition fees but also on the distribution of debt and allocation of funds across the entire education system. We also note that the focus on tuition fees policy suggests that higher education systems across the UK are set on a process of divergence, whereas there are strong pressures towards policy convergence in areas such as research policy and internationalisation.     

From ‘Tiger’ to ‘PIIGS’: Ireland and the use of heuristics in comparative political economy

This article analyses the consequences of the narrative construction of the group of countries that has been grouped as ‘PIIGS’ (Portugal, Ireland, Italy, Greece and Spain) for their sovereign debt risk rating. Acronyms for groups of countries can provide a useful shorthand to capture emergent similarities in economic profile and prospects. But they can also lead to misleading narratives, since the grounds for use of these terms as heuristic devices are usually not well elaborated. This article examines the process whereby the ‘PIIGS’ group came into being, traces how Ireland became a member of this grouping, and assesses the merits of classifying these countries together. The contention is that the repetition of the acronym in public debate did indeed shape the behaviour of market actors toward these countries. It is argued that this involved a co‐constituting process: similarities in market treatment drives PIIGS usage, which in turn promotes further similarities in market treatment. Evidence is found of Granger causality, such that increased media usage of the term ‘PIIGS’ is followed by increased changes in Irish bond yields. This demonstrates the constitutive role of perceptions and discourse in interpreting the significance of economic fundamentals. The use of acronyms as heuristics has potentially far‐reaching consequences in the financial markets.     

论代理问题与公司治理

公司治理结构是建立现代企业制度的核心问题之一。代理关系是公司治理问题产生的一个条件，与公司治理存在着密切的关系。代理关系问题产生的最重要的原因是劳动分工，代理收益大于代理成本是代理关系不断得以拓展的前提。所有权主体多元化与经营管理要求一元化存在着矛盾，如果公司进行外部融资，也必然产生了代理问题，并对公司治理产生一定的影响。     

Equality as a driver of inequality? Universalistic welfare,generalised creditworthiness and financialised housing markets

Abstract

Scandinavian countries are known for their universalistic welfare states, corporatist coordination, strong economic performances and egalitarian outcomes, an institutional combination often referred to as the ‘Nordic model’. However, these countries also possess volatile and increasingly vulnerable housing markets characterised by periods of sharp increases in prices and rents and some of the highest debt to income ratios in the world. The combination of a universalistic welfare state and housing market dynamics sets off a self-reinforcing process of increased stratification and re-familialisation. How did these orderly, egalitarian and welfare-oriented societies end up with housing markets that expose their citizens to increasing risk while driving inequality? The key lies in the effect the Nordic welfare state has on financialised housing markets. Successful decommodification of human lives leads to generalised creditworthiness which stimulates asset price inflation and new wealth and risk inequalities.     

The Impact of Energy Asset Privatisation on State Government Debt Management and Service Provision in Victoria and New South Wales

The purpose of this article is to look at the impact of the privatisation of the electricity and gas industries in the state of Victoria on the level of state government debt and subsequent ability of the state to deliver public services in the areas of health, education and law and order. In order to undertake this, a comparison is made with the state of New South Wales (NSW), where the privatisation of the electricity industry was often debated during the 1990s and 2000s, but never undertaken.     

Analyzing the impact of terrorism on tourism in Sri Lanka

While terrorism brings fear and chaos, tourism is the epitome of peace and happiness. Sri Lanka has always attracted international tourists due to tropical climate and beautiful tourist destinations. However, terrorism and the recent debt crisis have led to chaos and economic failure; in this study, the impact of terrorism, external debt, and military expenditure on international tourism in Sri Lanka have been empirically studied to unravel the dynamics. Dynamic ARDL simulation and cumulative fourier frequency causality results highlight the presence of an inverted N-shaped association between terrorism and tourism, as well as external debt and tourism. The phenomenal results from this analysis provide essential policy suggestions for Sri Lanka for economic recovery through the promotion of international tourism.     

Indebted life and money culture: payday lending in the United Kingdom

Critical social scientific research holds that credit–debt is a principal economic and governing relation in contemporary economy and society, but largely neglects money’s role in indebted life. Drawing on qualitative research in the payday loan market in the United Kingdom, the paper shows that borrowers typically relate to loans in monetary rather than financial terms and incorporate them into practices of payment, spending and online banking. To analyse how indebted life is variously experienced and enacted through money, the concept of money culture is developed to refer to money’s culture, money’s meanings and money’s affects. Borrowers enter into and negotiate payday loans through a digitally mediated money culture that both mobilizes and runs counter to money’s powerful fictions as circulating universal equivalent and calculative means of account.     

Public Debt,Economic Growth,and Public Sector Management in Developing Countries: Is There a Link?

The article investigates whether differences in public sector management quality affect the link between public debt and economic growth in developing countries. For this purpose, we primarily use the World Bank's institutional indices of public sector management (PSM). Using PSM thresholds, we split our panel into country clusters and make comparisons. Our linear baseline regressions reveal a significant negative relationship between public debt and growth. The various robustness exercises that we perform also confirm these results. When we dissect our data set into “weak” and “strong” county clusters using public sector management scores, however, we find different results. While public debt still displayed a negative relationship with growth in countries with “weak” public sector management quality, it generally displayed a positive relationship in the latter group. The tests for non‐linearity shows evidence of an “inverse‐U”‐shape relationship between public debt and economic growth. However, we fail to see a similar significant relationship on country clusters that account for PSM quality. Yet, countries with well‐managed public sectors demonstrate a higher public debt sustainability threshold. Copyright © 2015 John Wiley & Sons, Ltd.     

How do fiscally decentralized federations fare in times of crisis? Insights from Switzerland

This article examines federal dynamics during times of crisis in fiscally decentralized federations using Switzerland as an example. Based on qualitative research, we analyse how the relationship between the federal government and the cantons evolved during the recent ‘Great Recession’ and ensuing financial crisis. We contend that fiscally decentralized structures, as well as the consensus-oriented institutions of the political system, protect the federal balance of power. Our results show that Switzerland indeed adapted well to the crisis of the 2009 economic recession. However, the deficit crisis has revealed challenging coordination problems, notably in the areas of fiscal equalization and corporate taxation, which have the potential to put federal stability under stress. So far, the system has adapted well and safeguarded the federal order. Due to its combination of fiscally decentralized institutions and a strong consensus culture, Switzerland has proven to be a particularly robust federation.     

Fiscal Consolidation and Australia's Public Debt

Australia has experienced one of the fastest growing public debt levels in the world post‐Global Financial Crisis due to a series of large federal budget deficits driven by high government spending. In this paper we examine the balance sheet implications of this escalating public debt, before proposing some macro‐fiscal objectives for determining its sustainable level. These objectives are to (i) restore the federal government's solvency; (ii) eliminate foreign public debt; and (iii) achieve budgetary balance over the business cycle. Empirically, we first examine how much fiscal consolidation is required for debt stabilisation at current levels, before considering what sized budget balances are needed to achieve the target debt to GDP ratios consistent with the proposed objectives. The results show that no target debt to GDP level consistent with the optimal levels will be met on current fiscal settings in the medium term. This implies significantly greater fiscal consolidation is required to minimise future fiscal risk.     

Policy Inertia and the Persistence of Systemic Fragility

Many observers have diagnosed a fundamental shift in financial regulation since the 2008 crisis. In contrast, this article argues that changes have mostly been superficial. The ideas underpinning regulation have been adapted rather than overturned. Our financial system remains highly fragile, even if exceptionally loose monetary policy obscures such fragility temporarily. Governments show little appetite to correct the lopsided relationship between the financial sector and the real economy and turn the sector into a reliable engine of prosperity and stability rather than a continued source of systemic risk.     

Debt in just societies: A general framework for regulating credit

Debt presents a dilemma to societies: successful societies benefit from a substantial infrastructure of consumer, commercial, corporate, and sovereign debt but debt can cause substantial private and social harm. Pre‐crisis and post‐crisis solutions have seesawed between subsidizing and restricting debt, between leveraging and deleveraging. A consensus exists among governments and international financial institutions that financial stability is the fundamental normative principle underlying financial regulation. Financial stability, however, is insensitive to equality concerns and can produce morally impermissible aggregations in which the least advantaged in a society are made worse off. Solutions based only on financial stability can restrict debt without accounting for the risk of harm to persons least able to bear the risk, worsen preexisting inequalities, destroy or impair the net worth of households, and impose unfavorable distributive consequences. This article offers a new approach to assist policymakers in developing and evaluating regulation to take criteria in addition to financial stability into account, but which do not undermine the aim of financial stability. It calls for a luck egalitarian approach, offering policymakers options to take the debtor's choices into account while still accounting for cognitive mistakes people often make in debt decisionmaking. It offers a general framework for the underlying principles for the regulation of debt: its focus is not on any particular forms of debt or its regulation but in structuring debt regulation more generally. It offers a set of recommendations on how regulators can take concerns about luck and equality into account in regulatory design.     

The Eurozone as a Flawed Currency Area

The European single currency system has come under unprecedented strain during the past three years and there is little reason to assume that this will diminish, in any significant way, in the near future. This article briefly explores the background to the current eurozone crisis before outlining a number of potential solutions. Specifically, we discuss how the credit crunch induced recession of 2008 triggered the problems within the eurozone regarding sovereign debt, looking at the issues of spill‐over and free‐rider effects, together with the implementation of EMU fiscal rules. The analysis is then extended by outlining a series of potential remedies. This consists of a critical evaluation of solutions that the EU has already instigated (i.e. moral persuasion, financial relief measures and debt default), together with a series of alternative propositions (i.e. fiscal federalism and a European Clearing Union) and even the collapse of the euro.     

Losing out on substance but winning procedurally? The European Parliament and accountability in crisis legislation

Recent studies have found that the European Parliament (EP) had limited substantive influence on the European Union’s response to the European debt crisis. It has been argued that Parliament compensated this loss by expanding its oversight powers over executive bodies in the implementation of crisis legislation. This article systematically assesses the conditions under which the EP has been successful in increasing its account-holding powers, using new data on the accountability provisions included in economic and financial legislation put forward between 2009 and 2014. It is found that Parliament has indeed been more likely to gain oversight powers in crisis legislation. Levels of accountability are also higher in package deals and more salient legislation. The findings here provide a more nuanced picture of Parliament’s inter-institutional gains and losses in recent years and give more insight into the EP’s account-holding role.