Description
What accounts for the spread of the primary dealer model in sovereign debt management? Despite the pivotal role of public debt not only for the workings of government, but also for global finance at large, we lack systematic insight into the evolution of sovereign debt management. The primary dealer model which swept the board in the late 1980s, is a key reform with far reaching implications for not only debt sustainability and interest rates, but also for the relationship between governments and their agencies with financial and non-financial institutions. In this article, I examine the diffusion of the primary dealer model across 39 rich and emerging economies from 1970 to 2018. In so doing, I provide, with the use of a new data set, the first cross-national political-economy analysis of primary dealership creation. The results suggest that the costs of public debt have been a central driver of reform. The article provides further evidence that Economic and Monetary Union has shaped debt management practice.
