Is having a monarchy better for your economy?
Countries that have a king or queen as a head of state are on average more creditworthy and have stronger balance sheets than republics, new data shows.
Sovereigns with a monarchy have an average credit rating of 'A-' according to a new report from one of the largest ratings agencies, Standard & Poors, which rates 129 countries, 39 of which have a ruling monarch.
Nations without a king or queen have an average rating of around 'BBB' to 'BBB-' around 3 rungs below that of the average monarchy, the S&P report revealed.
"The universe of rated monarchies is diverse. Japan has the oldest continuing hereditary monarchy in the world, led by Emperor Akihito. In September this year, Queen Elizabeth II will become the longest-serving monarch in British history, surpassing the 63 years and 216 days record held by Queen Victoria in the 19th century," credit analyst at the agency, Joydeep Mukherji said.
Global ratings agencies assess countries according to their ability to pay back their debt and make timely interest payments to bondholders, giving them a score between AAA, the highest credit rating a nation can be awarded or D, which means a country is in default and unable to make its liabilities.
S&P rates 15 territories (or 12 percent of all rated sovereigns) that have Queen Elizabeth as their monarch, including the likes of Australia and Canada, which along with the U.K. enjoy a flawless AAA credit score.
Monarchies are also heavyweights when it comes to the amount of debt or bonds they issue, making up around 40 percent of the sovereign debt that Standard & Poor's rates around the world, even though there are almost three times more sovereigns without a king or queen as head of state.
S&P also note the difference between constitutional monarchies, those that have a king or queen but the ability to pass legislation lies with an elected parliament, and absolute monarchies, where the ruler's powers are not limited by law or constitution.
"There is no difference between constitutional and absolute monarchies in our assessment of their debt risk," credit analyst at the agency," Mukherji said.
"However, absolute monarchies score higher than constitutional monarchies in external risk and fiscal risk, largely reflecting the strong general government balance sheets and high external asset positions of wealthy monarchies in the eastern Arab world," he added.
All nine of the absolute monarchies rated by S&P are located in the Arab world, ranging from Morocco in the West, to Oman in the East. Jordan has the lowest rating of all the absolute monarchies with a BB- which is deemed below "investment grade".
The largest royal sovereign debtor is Japan, with more than $11 trillion in outstanding rated debt, which amounts to just over 25 percent of all sovereign debt globally.
The debt issued by various rated countries with Queen Elizabeth II as monarch amounts to $3.6 trillion (or just above 8 percent of the global amount). The third-largest royal debtor is Spain, with nearly $1 trillion in outstanding debt.
In debt and balance sheet terms, absolute monarchies have more spare cash than their constitutional counterparts, with none appearing in the list of top 10 indebted monarchies.