Prof. Vaaler Quoted and Research Noted in Article on Investment in Africa

Professor Paul Vaaler was interviewed by Africa Business magazine for an article on recent investment trends in Sub-Saharan Africa, which noted Vaaler's research findings on sovereign credit rating and government borrowing. His 2013 article in Economics Letters, "Credit Rating Agencies and Elections in Emerging Democracies: Guardians of Fiscal Discipline?" demonstrates that governments in many "new democracies" of the developing world borrow and spend excessively in the run-up to elections. But those governments with higher sovereign credit ratings borrow less, suggesting that agencies "discipline" politicians vulnerable to such political budget cycle behavior. Vaaler's research suggests that agencies could help new democracies in Sub-Saharan Africa avoid electorally-motivated policy distortions that decrease long-term economic growth and development.