Zsofia Barta, Ph.D.
zbarta@albany.edu
University at Albany SUNY
City: Albany, New York - 12222
Country: United States
About Me:
My research and teaching interests are in the areas of comparative political economy and public policy, with particular focus on the societal origins of policy variation across countries. My main research area is the politics of public debt accumulation, covering diverse aspects of public finances from societal conflicts surrounding austerity to the influence of market actors — primarily rating agencies — on public spending. My book, 'In The Red: The Politics of Public Debt Accumulation in Developed Countries' (2018, University of Michigan Press) explores the variations in countries' ability to control their debt. My journal articles shed light on how credit rating agencies influence the ability of countries to choose the policies they prefer. At the University at Albany, I teach undergraduate and graduate courses in comparative public policy, public finances and the welfare state.
Research Interests
European Politics
Political Economy
Public Policy
Class, Inequality, and Labor Politics
Public Debt
Sovereign Credit Ratings
Market-constrained Democracy
Social Coalitions
Welfare State
Countries of Interest
Belgium
Greece
Italy
Japan
United States
Hungary
My Research:
My research focuses on two distinct but interconnected aspects of public debt. On the one hand, I explore how policy makers’ ability to control the accumulation of public debt is constrained by domestic politics. My book, In the Red: The Politics of Public Debt Accumulation in Developed Countries (2018, University of Michigan Press), explains why prosperous countries like Belgium, Greece, Italy and Japan accumulated so much debt in the past decades that they exposed themselves to the vagaries of financial markets and became vulnerable to sovereign default. On the other hand, I study how large stocks of public debt constrain policy makers’ ability to pursue policies that their constituencies demand. More specifically, I focus on sovereign credit ratings. I explore how credit rating agencies assess the impact of politics and policies on countries’ creditworthiness, showing that certain political and policy developments trigger adverse rating changes, which in turn, increase the burden of interest payments on public budgets.
Publications:
Journal Articles:
How does government partisanship influence sovereign credit ratings of developed countries? Given the convergence of fiscal and monetary outcomes between left and right governments in the past decades, credit rating agencies (CRAs) should in principle not discriminate according to ideology. However, we hypothesize that CRAs might lower ratings for left governments as a strategy to limit negative policy and market surprises as they strive to keep ratings stable over the medium term. A panel analysis of Standard & Poor’s, Moody’s, and Fitch’s rating actions for 23 Organisation for Economic Co-Operation and Development (OECD) countries from 1995 to 2014 shows that left executives and the electoral victory of nonincumbent left executives are associated with significantly higher probabilities of negative rating changes. We find no evidence of similar systematic partisan bias in spreads on government bonds, but spreads do adjust to partisan-biased downgrades. This suggests that CRAs may introduce partisan discrimination into sovereign credit markets.
A perennial problem for fiscal governance in the euro area has been the lack of support from markets. Far from disciplining budgetary policies, capital flows financed deficits at historically low interest rates even when they broke EU fiscal rules. Theory would lead us to expect that the international-commercial and the supranational-technocratic assessments of sovereign debt are fairly aligned. But they were not. We show that credit rating agencies (CRAs) and Eurostat have rather different assessments of what certain policies mean for sovereign debt: the privatization of state-owned enterprises, pension reforms and more recently bank rescue programs. These assessments reveal divergent approaches. Private agencies are prone to conformism and herding behavior, allowing for little consistent discipline, while the public agency follows a bureaucratic imperative of accountability and transparency, which gets in the way of evolving policy priorities. Our findings thus shed light on the difficulties of fiscal governance by regulation only.
Books Written:
Why do rich countries flirt with fiscal disaster? Between the 1970s and the 2000s, during times of peace and prosperity, affluent countries—like Belgium, Greece, Italy, and Japan—accumulated so much debt that they became vulnerable and exposed themselves to the risk of default. In the past three decades, an extensive scholarly consensus emerged that these problems were created by fiscal indiscipline, the lack of sufficient concern for budgetary constraints from policy makers as they try to please voters. This approach formed the foundation for the fiscal surveillance system that attempted to bring borrowing in European countries under control via a set of fiscal rules. In the Red demonstrates that the problem of sustained, large-scale debt accumulation is an adjustment issue rather than a governance failure. Irrespective of whether the original impetus for borrowing arose from exogenous changes or irresponsible decision making, policy makers invariably initiate spending cuts and/or tax increases when debt grows at an alarming rate for several years in a row. Zsófia Barta argues that explaining why some countries accumulate substantial amounts of debt for decades hinges on understanding the conditions required to allow policy makers to successfully put into place painful adjustment measures.
Media Appearances:
Other:
Why do rich countries flirt with fiscal disaster? Zsófia Barta, author of In The Red: The Politics of Public Debt Accumulation in Developed Countries [www.press.umich.edu/9726915/in_the_red], challenges a long-held consensus by arguing that the problem of sustained, large-scale debt accumulation is an adjustment issue rather than a governance failure. On this episode Mark talks with Zsófia Barta about how understanding why some countries accumulate substantial amounts of debt for decades hinges on understanding the conditions required to successfully enact painful adjustment measures. You can see Zsófia Barta's full presentation from her April 15th visit to the Rhodes Center here: youtu.be/G5lxTxuIUAw