The Personal Attributes of Finance Ministers Affect the Development of Public Debt

Whether or not a country’s national budget is placed on a firm footing also depends on the finance minister who is responsible for it. This is the result of a study conducted by the Centre for European Economic Research (ZEW). The study investigated how certain personal attributes of finance ministers from 15 European countries affect the development of public debt.

Contrary to common assumptions, a finance minister’s political affiliation barely has any influence on how the public debt level develops under his aegis, nor does it play a role for his ability to curb his ministerial colleagues’ spending demands.  The finance minister’s education, for example a degree in economics, does not affect the development of public debt under their administration as well.

Observing the political experience of a finance minister, however, reveals a different picture. The more (less) experience a finance minister has already gained from earlier positions as a cabinet member, the lower (higher) the public debt level.

The study is based on a dataset designed especially for this analysis which contains information on the attributes of finance ministers from 15 European countries. The data originates from the official websites of the governments and ministries of finance of the respective countries and refers to the period from 1980 to 2010.

For further information please contact

Marc-Daniel Moessinger, Phone +49 621/1235-161, E-mail moessinger@zew.de