In this presentation, we investigate whether the onset of a sovereign default is associated with an increase in the probability that incumbent politicians lose office. We construct a novel dataset of finance ministers tenure and turnover for 84 countries between 1980 and 2012. We find robust evidence that sovereign default onsets are associated with statistically and economically significant increases in the probability of finance minister turnover. The evidence regarding chief executive turnover is mixed.
Sub-title:
Sovereign Default and Political Turnover