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Institutional constraints on profligate politicians: the conditional effect of partisan fragmentation on budget deficits

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  • Wehner, Joachim

Abstract

The literature on the common pool resource problem in budgeting has thus far not explored the likely interaction between size fragmentation (the number of decision makers) and procedural fragmentation (the structure of the process in which they interact).The argument put forward in this article is that the effects of these two types of fragmentation should not be additive, but multiplicative, because theory suggests that the impact of size fragmentation on fiscal policy is conditional on the extent of procedural fragmentation. Using panel data for 57 countries over the period of 1975 to 1998, the author empirically investigates this interaction in the legislative context and finds strong evidence that partisan fragmentation is associated with higher deficits only when it is not moderated by limits on parliamentary amendment authority.

Suggested Citation

  • Wehner, Joachim, 2010. "Institutional constraints on profligate politicians: the conditional effect of partisan fragmentation on budget deficits," LSE Research Online Documents on Economics 28649, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:28649
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    References listed on IDEAS

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    1. Joachim Wehner, 2006. "Assessing the Power of the Purse: An Index of Legislative Budget Institutions," Political Studies, Political Studies Association, vol. 54(4), pages 767-785, December.
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    7. Ernesto Stein & Ernesto Talvi & Alejandro Grisanti, 1999. "Institutional Arrangements and Fiscal Performance: The Latin American Experience," NBER Chapters, in: Fiscal Institutions and Fiscal Performance, pages 103-134, National Bureau of Economic Research, Inc.
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    12. Joachim Wehner, 2006. "Assessing the Power of the Purse: An Index of Legislative Budget Institutions," Political Studies, Political Studies Association, vol. 54, pages 767-785, December.
    13. Perotti, Roberto & Kontopoulos, Yianos, 2002. "Fragmented fiscal policy," Journal of Public Economics, Elsevier, vol. 86(2), pages 191-222, November.
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    Cited by:

    1. Makoto Nakanishi, 2019. "Budgetary institutions with or without coalition government: political economy of parliamentary democracies," International Journal of Economic Policy Studies, Springer, vol. 13(1), pages 193-216, January.
    2. Beetsma, Roel & Giuliodori, Massimo & Walschot, Mark & Wierts, Peter, 2013. "Fifty years of fiscal planning and implementation in the Netherlands," European Journal of Political Economy, Elsevier, vol. 31(C), pages 119-138.
    3. Abel Bojar, 2015. "Intra-governmental bargaining and political budget cycles in the European Union," European Union Politics, , vol. 16(1), pages 90-115, March.
    4. Wehner, Joachim & de Renzio, Paolo, 2013. "Citizens, Legislators, and Executive Disclosure: The Political Determinants of Fiscal Transparency," World Development, Elsevier, vol. 41(C), pages 96-108.
    5. Lasse Aaskoven, 2018. "Budget institutions and taxation," Public Choice, Springer, vol. 174(3), pages 335-349, March.
    6. Wehner, Joachim, 2010. "Cabinet structure and fiscal policy outcomes," LSE Research Online Documents on Economics 28648, London School of Economics and Political Science, LSE Library.
    7. Bäck, Hanna & Lindvall, Johannes, 2015. "Commitment Problems in Coalitions: A New Look at the Fiscal Policies Of Multiparty Governments," Political Science Research and Methods, Cambridge University Press, vol. 3(1), pages 53-72, January.

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    More about this item

    Keywords

    budget institution; deficit; fiscal policy; legislature; political party;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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