An empirical analysis of sustainability of public debt among BRICS nations

Title

An empirical analysis of sustainability of public debt among BRICS nations

Creator

Joy J.; Panda P.K.

Description

The main objective of this paper is to verify the sustainability of public debt among Brazil, Russia, India, China and South Africa (BRICS) in a political economy framework. Annual panel data have been used for BRICS countries from World Development Indicators of World Bank for the period 19802017 for the analysis. Bohn's sustainability framework is used to examine the sustainability of public debt in BRICS nations and verify the influence of political economic variables such as election year, coalition dummy, ideology of the government and unemployment on public debt sustainability. The results suggest that public debt sustainability is weak for BRICS as a whole. China and India have a better public debt sustainability coefficients compared to the same for Brazil, Russia and South Africa. Structural change dummy included in the model suggests that debt sustainability is severely affected after the 2008 crisis period. Political factors have influence on debt sustainability in BRICS. Electoral cycle year and coalition dummy variables adversely affect public debt sustainability in BRICS. While centrist political ideology is found to be significant and negative, left and right ideologies are not significant for debt sustainability. Since debt sustainability is found to be weak in BRICS, countries in the region need to adopt necessary measures to improve their primary balance through appropriate fiscal and debt management. Besides, it is important for the governments to prioritize fiscal prudence irrespective of their ideologies and political compulsions. 2020 John Wiley & Sons, Ltd

Source

Journal of Public Affairs, Vol-21, No. 2

Date

2021-01-01

Publisher

John Wiley and Sons Ltd

Coverage

Joy J., Department of Economics, CHRIST(Deemed to be University), Bengaluru, India; Panda P.K., Department of Economics, Central University of Tamil Nadu, Thiruvarur, India

Rights

Restricted Access

Relation

ISSN: 14723891

Format

Online

Language

English

Type

Article

Identifier

https://doi.org/10.1002/pa.2170

https://www.scopus.com/inward/record.uri?eid=2-s2.0-85085571782&doi=10.1002%2fpa.2170&partnerID=40&md5=64677c98c49e9f28c453994acc5d41f5