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Are we all playing the same game? The economic effects of constitutions depend on the degree of institutionalization

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  • Caruso, Germán
  • Scartascini, Carlos
  • Tommasi, Mariano

Abstract

This paper addresses an important source of variation within democracies — the degree of institutionalization. The concept of institutionalization describes the extent to which politics takes place, and is believed to take place, via formal political institutions. Countries vary in their degree of institutionalization, hence, in the degree to which political actors pursue their goals via conventional politics or via “alternative political technologies”. This paper postulates that if politics is conducted largely outside of formal channels, the structure of the formal channels should not matter much as a determinant of policy outcomes. To address this issue this paper proposes a new index of institutionalization and with it revisits seminal work regarding the impact of constitutions on public spending. The findings show that the effect of constitutional rules on policy outcomes is conditional on the degree of institutionalization.

Suggested Citation

  • Caruso, Germán & Scartascini, Carlos & Tommasi, Mariano, 2015. "Are we all playing the same game? The economic effects of constitutions depend on the degree of institutionalization," European Journal of Political Economy, Elsevier, vol. 38(C), pages 212-228.
    • Handle: RePEc:eee:poleco:v:38:y:2015:i:c:p:212-228
    DOI: 10.1016/j.ejpoleco.2015.02.007
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    Cited by:

    1. Scott Dallman & Anusha Nath & Filip Premik, 2021. "The Effect of Constitutional Provisions on Education Policy and Outcomes," Staff Report 623, Federal Reserve Bank of Minneapolis.
    2. Voigt, Stefan, 2020. "Mind the Gap – Analyzing the Divergence between Constitutional Text and Constitutional Reality," ILE Working Paper Series 32, University of Hamburg, Institute of Law and Economics.
    3. Bernard Steunenberg, 2021. "The politics within institutions for regulating public spending: conditional compliance within multi-year budgets," Constitutional Political Economy, Springer, vol. 32(1), pages 31-51, March.
    4. Caruso, Germán & Scartascini, Carlos & Tommasi, Mariano, 2015. "Are we all playing the same game? The economic effects of constitutions depend on the degree of institutionalization," European Journal of Political Economy, Elsevier, vol. 38(C), pages 212-228.
    5. Ardanaz, Martín & Hallerberg, Mark & Scartascini, Carlos, 2020. "Fiscal consolidations and electoral outcomes in emerging economies: Does the policy mix matter? Macro and micro level evidence from Latin America," European Journal of Political Economy, Elsevier, vol. 64(C).
    6. Pavlik, Jamie Bologna & Jahan, Israt & Young, Andrew T., 2023. "Do longer constitutions corrupt?," European Journal of Political Economy, Elsevier, vol. 77(C).
    7. Guizzo Altube, Matías & Scartascini, Carlos & Tommasi, Mariano, 2023. "The Political Economy of Redistribution and (in)Efficiency in Latin America and the Caribbean," IDB Publications (Working Papers) 13194, Inter-American Development Bank.
    8. Fernando Antonio Ignacio González & María Emma Santos & Juan Cruz Fernández, 2021. "¿Discontinuidades o Continuidades Políticas? Explorando sus Efectos sobre el Desempeño Económico: El Caso de la Intervención Federal en Santiago del Estero," Working Papers 100, Red Nacional de Investigadores en Economía (RedNIE).
    9. María Franco Chuaire & Carlos Scartascini & Mariano Tommasi, 2017. "State capacity and the quality of policies. Revisiting the relationship between openness and government size," Economics and Politics, Wiley Blackwell, vol. 29(2), pages 133-156, July.
    10. Justin Callais & Andrew T. Young, 2022. "Does rigidity matter? Constitutional entrenchment and growth," European Journal of Law and Economics, Springer, vol. 53(1), pages 27-62, February.
    11. Ryan H Murphy, 2022. "The constitution of ambiguity: The effects of constitutions on economic freedom," Economic Affairs, Wiley Blackwell, vol. 42(2), pages 240-258, June.
    12. Maria Franco & Carlos Scartascini & Mariano Tommasi, 2014. "State Capacity and the Quality of Policies: Revisiting the Relationship between Openness and the Size of Government," IDB Publications (Working Papers) 86254, Inter-American Development Bank.
    13. Mariano Tommasi & Germán Caruso & Carlos Scartascini, 2014. "Are We Playing the Same Game? The Economic Effects of Constitutions Depend on the Degree of Institutionalization," Working Papers 116, Universidad de San Andres, Departamento de Economia, revised Dec 2014.

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    More about this item

    Keywords

    Political economy; Institutionalization; Political institutions; Government expenditure; Alternative political technologies;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H10 - Public Economics - - Structure and Scope of Government - - - General

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