Fascinating new paper on early European sovereign credit risk:
POLITICAL REGIMES AND SOVEREIGN CREDIT RISK IN EUROPE, 1750-1913
European Review of Economic History (2009), 13 : 31-63 Cambridge University Press
Abstract: This paper uses a new panel data set to perform a statistical analysis of
political regimes and sovereign credit risk in Europe from 1750 to 1913. Old Regime
polities typically suffered from fiscal fragmentation and absolutist rule. By the start of World War I, however, many such countries had centralized institutions and limited government. Panel regressions indicate that centralized and/or limited regimes were associated with significant improvements in credit risk relative to fragmented and absolutist ones. Structural breaks tests also reveal close relationships between major turning points in yield series and political transformations.