Governments are expected to be a stabilizing force when the economy is in trouble, but recently they are a source of chaos. The cause behind the sovereign debt crisis is debt that far exceeds a government’s ability to repay. Why do governments of debt-ridden countries lose the sense of risk that unlimited accumulation of debt would bring their countries to the brink of insolvency? Economic factors alone cannot provide a complete explanation. This paper combines agency theory with studies on public finance to develop a model to elucidate a government’s behavior in public finance. We find that too much political concern underlies irresponsible fiscal policies. Enhancing the independence of budget offices and intensifying the transparency of public finance can be prescriptions to contain the reoccurrence of sovereign debt crisis.