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Truth Commissions: Reputation and Lending in the Aftermath of Transitions Andrea Abel Stanford University IPES 2008.

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Presentation on theme: "Truth Commissions: Reputation and Lending in the Aftermath of Transitions Andrea Abel Stanford University IPES 2008."— Presentation transcript:

1 Truth Commissions: Reputation and Lending in the Aftermath of Transitions Andrea Abel Stanford University IPES 2008

2 2 Puzzle In the process of transitions away from non-democracy and situations of war, genocide and other human rights abuses, why do some countries voluntarily adopt Truth Commissions, whilst others do not?

3 3 A Theory of Reputations and Lending Claim One: Voluntary TCs are a costly signal to the international community. Claim Two: This signal has been important for the 'group' of international lenders lending to transitioning states. Claim Three: TCs are becoming increasingly mandated as part of transition process, rather than being voluntary, with the effect that TCs are losing their worth as a signal of regime type.

4 4 A Theory of Reputations and Lending Why would international lenders give better terms and conditions for loans to countries that voluntarily implement TCs?  Normative Argument  Institutional Argument  Reputational Spill-over argument

5 5 Existing Theories: Truth Commissions Under what circumstances, and by whom, have TCs been adopted?

6 6 Existing Theories: International Lending What determines the terms of lending given by official lenders to sovereign borrowers? Institutional Factors North and Weingast 1987, Schultz and Weingast Strategic Interests Thacker 1999, Andersen et. Al 2005 Reputations Diamond 1989, Tomz 2007

7 7 Empirics: Data

8 8 Summary statistics for key variables in the analysis (Standard deviations in parentheses)‏

9 9 Empirics: Statistical Analysis

10 10 Conclusions and Future Work Reputational Spill-over Mechanism  Voluntary TC and commitment to reform in human rights and democratization  Or, does the causal arrow run from democratization to increased probability of adopting a TC? Institutions Mechanism  Step 1: Voluntary TC Increase in Democratic Institutions  Step 2: Existence of Democratic Institutions Better terms of lending Normative Mechanism  Why the initial discrimination between voluntary and involuntary?  Why the narrowing of interest rate gap as more TCs adopted? Where to?  Look more closely at lending decisions of multilateral institutions – interviews  Look at lending by private investors  Case studies of countries who voluntarily adopted TCs, where TCs were mandated, and where nothing was done.


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