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Does Membership in International Organizations Increase Governments’ Credibility? Testing the Effects of Delegating Powers
This paper analyzes whether nation-state governments can increase their credibility by becoming members of international organizations. Credibility is an important asset because it determines the real interest rate and is expected to have an important impact on investment and growth. It is hypoth...
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| Published in: | MAGKS - Joint Discussion Paper Series in Economics (Band 19-2008) |
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| Main Authors: | , |
| Format: | Work |
| Language: | English |
| Published: |
Philipps-Universität Marburg
2008
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| Subjects: | |
| Online Access: | PDF Full Text |
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| Summary: | This paper analyzes whether nation-state governments can increase their credibility by
becoming members of international organizations. Credibility is an important asset
because it determines the real interest rate and is expected to have an important impact
on investment and growth. It is hypothesized that the degree of delegation to
international organizations can improve the credibility of nation-state governments.
This hypothesis is tested by introducing three new indicators for international
delegation. On the basis of panel data for up to 136 countries and the time period from
1984 to 2004, membership in international organizations is significantly and robustly
linked with better credibility, here proxied for by country risk ratings. Two more results
stand out: the longer a country has had a high level of membership, the higher its
credibility, ceteris paribus; and: the credibility-enhancing effect is strongest in countries
whose domestic institutions are weak. |
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| ISSN: | 1867-3678 |
| DOI: | 10.17192/es2023.0206 |