Doctoral Dissertation Research in Political Science: What Drives Subnational Borrowing Conditions? Social Spending and Government Size

世界各国政府正变得越来越依赖信贷市场。这种依赖正在增强投资者奖励或惩罚政府的能力，因为政府的政策责任、规模和其他潜在的投资者利润驱动因素。这个项目考察了市场惩罚和奖励的来源，因为它们与地方和地区政府有关。它解决了两个问题。首先，国际评级机构是否会惩罚地方和地区政府在医疗保健、教育和其他核心社会服务职能上的支出？其次，哪些政府以最优惠的条件借款：代表大司法管辖区还是小司法管辖区的政府？这位研究人员认为，投资者惩罚政府的是僵化的社会承诺：在医疗保健和其他政治敏感社会服务上的高水平支出。这些承诺使大量选民和加入工会的服务提供者受益，相应地很难削减。这限制了地方和地区政府平衡预算可能需要的财政灵活性，导致投资者要求提高公共债券和贷款的利率。但这些反应被几个国家层面的因素所抵消，包括地方政府调整收支的权力、国家财政和经济表现以及国家救助的可能性。这位研究人员还辩称，与公认的看法相反，小政府的借款条件往往比大发行人更优惠。尽管投资者看重大型发行人债务的流动性，但他们也看重多元化。投资于相对稀缺的小政府债券，让投资者可以分散投资，不再投资于大型发行人更为丰富的工具。但规模的相对优势也取决于市场状况及其与投资者流动性偏好的相互作用。流动性需求随着市场波动而增加，导致资金从小国政府的证券流向大型政府的证券。这些资金外逃的强度取决于投资者的流动性偏好，这种偏好因时间和国家而异。这项工作使用了广泛的定量和定性方法和数据来测试这些说法，包括对信用评级和方法的广泛跨国分析，对加拿大和德国地区借款成本的更有针对性的统计考察，以及对债券承销商和投资者的半结构化采访。这项工作推进了政治学和经济学的跨学科研究。首先，它是对金融全球化对地方社会服务提供的影响进行的第一次广泛的跨国分析。到目前为止，奖学金几乎完全集中在国家一级，而社会服务的提供在很大程度上是分散的。其次，该项目推进了对经济主体对社会支出偏好的研究。第三，该项目有助于财政联邦制和地方救助担保方面的工作。与大量文献相反，它几乎没有发现将纾困担保与地方财政依赖联系起来的证据，但它确实找到了将担保与其他因素联系起来的证据。最后，它推动了关于财政分权对大政府和小政府的好处的辩论。这项研究做出了几个更广泛的贡献。它揭示了在一个紧缩和金融不确定的时代，分散的社会支出的可持续性。它还加强了对公共借款成本、政府规模和全球日益普遍的按市值计价会计做法之间的联系的理解。此外，它还阐明了次国家救助担保的决定因素。

The world's governments are growing increasingly dependent on credit markets. This dependence is strengthening investors' capacity to reward or punish governments for their policy responsibilities, size, and other potential drivers of investor profits. This project examines sources of market punishments and rewards as they relate to local and regional governments. It addresses two questions. First, do international rating agencies penalize local and regional governments for spending on health care, education, and other core social service functions? Second, which governments borrow on the best terms: those representing large or small jurisdictions? The researcher argues that investors penalize governments for rigid social commitments: high levels of spending on health care and other politically sensitive social services. These commitments benefit large numbers of voters and unionized service providers and are correspondingly difficult to cut. This limits the fiscal flexibility that local and regional governments may require to balance budgets, causing investors to demand higher interest rates on public bonds and loans. But these reactions are offset by several national-level factors, including sub-national authority to adjust revenues and expenditures, national fiscal and economic performance, and the likelihood of national bailouts. The researcher also argues that, contrary to received wisdom, small governments often borrow on better terms than do large issuers. Although investors value the debt of large issuers for its liquidity, they also value diversification. Investing in the relatively scarce debt of small governments allows investors to diversify away from the more plentiful instruments of large issuers. But the relative advantages of size also depend on market conditions and their interactions with investors' liquidity preferences. Liquidity needs increase with market volatility, inducing flights from the securities of small to the securities of large governments. The intensity of these flights depends on investors' liquidity preferences, which vary across time and countries. This work tests these claims using a wide range of quantitative and qualitative methods and data, including broad cross-national analysis of credit ratings and methodologies, a more focused statistical look at regional borrowing costs in Canada and Germany, and semi-structured interviews with bond underwriters and investors. This work advances interdisciplinary research in political science and economics. First, it stands as the first broadly cross-national analysis of the effects of financial globalization on sub-national provision of social services. Scholarship to date has focused almost exclusively on the national level, while provision of social services has been decentralized to significant degrees. Second, this project advances research on economic agents' preferences over social spending. Third, the project contributes to work on fiscal federalism and sub-national bailout guarantees. Contrary to a large literature, it finds little evidence linking bailout guarantees to sub-national fiscal dependence, but it does find evidence linking guarantees to other factors. Finally, it advances debates about the merits of fiscal decentralization for big and small governments. This research makes several broader contributions. It sheds light on the sustainability of decentralized social spending in an age of austerity and financial uncertainty. It also enhances understanding of the links between public borrowing costs, government size, and the mark-to-market accounting practices increasingly prevalent across the globe. In addition, it illuminates the determinants of sub-national bailout guarantees.