How Do Credit Rating Agencies Rate? An Implementation Perspective on the Assessment of Austerity Programs during the European Debt Crisis

Sager, Fritz; Hinterleitner, Markus (2016). How Do Credit Rating Agencies Rate? An Implementation Perspective on the Assessment of Austerity Programs during the European Debt Crisis. Politics & Policy, 44(4), pp. 783-815. Wiley 10.1111/polp.12165

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This is the pre-peer reviewed version of the following article: How Do Credit Rating Agencies Rate? An Implementation Perspective on the Assessment of Austerity Programs during the European Debt Crisis which has been published in final form at 10.1111/polp.12165. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.

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During the recent European debt crisis, credit rating agencies (CRAs) and the ratings they were producing became a frequent bone of contention. We analyze which factors are considered by CRAs when they judge a state's credibility in implementing an announced austerity program. The results of a fuzzy-set Qualitative Comparative Analysis of credit ratings show that implementation-related factors had a comparatively minor impact while the level of economic competitiveness of the evaluated country displayed high explanatory power. The findings highlight the desolate implications for less competitive countries that emanate from credit ratings and their influence on refinancing costs. While competitive states are deemed better able to generate future growth and therefore get positive evaluations, less competitive states cannot prevent (further) downgrades in the short or middle-term by announcing austerity programs.

Item Type:

Journal Article (Original Article)

Division/Institute:

11 Centers of Competence > Center of Comptetence for Public Management (KPM)

UniBE Contributor:

Sager, Fritz and Hinterleitner, Markus

Subjects:

300 Social sciences, sociology & anthropology > 350 Public administration & military science
300 Social sciences, sociology & anthropology
300 Social sciences, sociology & anthropology > 320 Political science
300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

1747-1346

Publisher:

Wiley

Language:

English

Submitter:

Markus Hinterleitner

Date Deposited:

14 Sep 2016 17:12

Last Modified:

14 Sep 2016 17:12

Publisher DOI:

10.1111/polp.12165

BORIS DOI:

10.7892/boris.88014

URI:

https://boris.unibe.ch/id/eprint/88014

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