MERITOCRATIC BUREAUCRACY, COALITION GOVERNMENTS AND PUBLIC DEBT - A statistical analysis of the merits of meritocracy for government fiscal outcomes

Abstract

Since the end of the 1980s, many studies have found a relationship between coalition governments and larger debt accumulation. Several contributions have proposed different moderators of this relationship, but none have considered the role of civil servants in the bureaucracy. This thesis focuses on the moderating effect of a higher degree of meritocratic bureaucracy. It hypothesizes that coalition governments are associated with larger debt accumulation and that a higher degree of meritocratic bureaucracy should reduce debt accumulation in coalition governments, but also independent of the type of government. The theoretical expectations are evaluated through an OLS regression model on a sample of 28 European countries over the time period 1962–2019. The empirical analysis finds no support for the hypotheses connecting coalition governments to larger debt accumulation. The results suggest some association between a higher degree of meritocratic bureaucracy and reduced debt accumulation independent of the type of government, but only under some model specifications. Instead, the findings show consistent support for the explanatory power of several economic factors.