Politicians’ coherence and government debt

We model a society that values coherence between the long-term commitment of politicians to given levels of public good provision and current policy. In that context, we suggest a novel mechanism by which issuing government debt can affect electoral results. Debt is exploited by an incumbent politician who favors a low level of public good supply, taking advantage of the cost paid by her opponent, who is committed to a higher level of supply. More public debt reduces voters’ preferred level of public good consumption and therefore are less likely to elect the opponent, given her commitment to a losing policy.