Do the personal characteristics of finance ministers affect changes in public debt?

摘要

Using a unique dataset of the personal characteristics of national finance ministers in Western Europe (1980-2010), I show that a finance minister's experience affects the national debt-to-GDP ratio. The increase in the debt-to-GDP ratio is smaller if the finance minister stays in office for an additional year. This result is robust to the inclusion of the personal characteristics of prime ministers and a measure of political stability. However, the magnitude of the effect is sensitive to how finance ministers are selected in the econometric model when more than one minister holds office during a particular year. The estimation of interaction terms further reveals that experience particularly matters in election years or in times of negative GDP growth because an experienced finance minister has the power to restrict the usual increase in the debt-to-GDP ratio. In contrast, a finance minister's educational background and ideological leaning have no significant impact on the debt-to-GDP ratio.