This article tests the influential democratic advantage hypothesis – that democratic governments have historically borrowed more cheaply than autocratic governments – in the context of the first financial globalization, from circa 1870 to 1913. We construct indicators of political regime types, then regress government bond spreads of 27 independent capital-importing countries on them. In contrast with the mainstream literature, the results suggest that democracies were associated with higher country risk. Our findings indicate that autocratic regimes had a significant advantage: democracies paid 5.7% more on their debt than autocracies, controlling for several financial and political variables. This gap is the equivalent of 35.4% of the negative effect defaults had on credit costs. Our conclusions hold when allowing for different definitions of political regime type and bond spreads. The correlations identified also find support in qualitative evidence, according to which creditors favored autocracies for being politically more stable than democracies.

本文在大约 1870 年至 1913 年的第一次金融全球化的背景下检验了有影响力的民主优势假设——民主政府在历史上比专制政府借钱更便宜。我们构建了政治制度类型的指标，然后回归政府债券利差27 个独立的资本输入国。与主流文献相比，结果表明民主国家与较高的国家风险相关。我们的研究结果表明，专制政体具有显着优势：在控制若干金融和政治变量的情况下，民主政体比专制政体多支付 5.7% 的债务。这一差距相当于违约对信贷成本的负面影响的 35.4%。当允许对政治体制类型和债券利差进行不同定义时，我们的结论仍然成立。所确定的相关性也得到了定性证据的支持，根据这些证据，债权人赞成独裁国家在政治上比民主国家更稳定。