@phdthesis{Cordes, author = {Cordes, Till}, title = {The Political Economy of Sovereign Rating Criteria : What Rating Agencies Demand from National Governments}, school = {Hertie School}, pages = {204}, abstract = {Sovereign rating downgrades have led to strong criticism of the criteria used by the three major rating agencies, Standard \& Poor's, Moody's, and Fitch. But which criteria do rating agencies actually use for evaluating the creditworthiness of sovereign states? The existing literature points to a few basic macroeconomic factors. This book shows that, in addition, rating agencies take political factors into account, in particular a country's economic liberalization policies, international economic agreements, and political institutions. The book demonstrates the importance of political factors for sovereign ratings based on a new data set for 145 rated countries, which is the largest sample analyzed in the literature thus far. Methodologically, the study combines panel econometric evidence with a text analysis of a unique database of more than 1,200 rating announcements. In 72 per cent of these rating announcements, rating agencies refer to political factors as a key rating determinant. This book argues that rating agencies have good reason for taking political indicators into account as well. (...)}, language = {en} }