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Political Bias in Fiscal Policy Formation: an Econometric Analysis of Coalition Systems

Author

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  • Fabrizio Carmignani

    (Department of Economics, University of Milan-Bicocca and Department of Economics, University of Glasgow)

Abstract

This paper provides a comprehensive econometric analysis of some debated issues concerning the political and institutional determinants of fiscal policy outcomes. Several innovative results are obtained. It turns out that a significant effect on fiscal policy formation can be traced back to the ideological orientation of the policymaker, to the degree of cabinet instability, to cross-country differences in electoral and budgetary institutions and to the dispersion of political power within the ruling coalition. Instead, the preferences of the median voter appear to have little importance. The evidence also rejects the theory of fiscal illusion in decision-making.

Suggested Citation

  • Fabrizio Carmignani, 2000. "Political Bias in Fiscal Policy Formation: an Econometric Analysis of Coalition Systems," Working Papers 28, University of Milano-Bicocca, Department of Economics, revised Dec 2000.
    • Handle: RePEc:mib:wpaper:28
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    References listed on IDEAS

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    Cited by:

    1. Fabrizio Carmignani, 2003. "Political Instability, Uncertainty and Economics," Journal of Economic Surveys, Wiley Blackwell, vol. 17(1), pages 1-54, February.
    2. Mounir MARZOUGUI, 2016. "L’impact de l’instabilité politique sur la volatilité de l’inflation dans les pays en développement," Journal of Academic Finance, RED research unit, university of Gabes, Tunisia, vol. 7(1), June.
    3. Fabrizio Carmignani, 2001. "Theory and Evidence on the Political Economy of Growth," Working Papers 33, University of Milano-Bicocca, Department of Economics, revised Jan 2001.
    4. Jannils Łukasz, 2021. "The concept of political instability in economic research," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 57(3), pages 268-284, September.
    5. Mounir MARZOUGUI, 2016. "L’impact de l’instabilité politique sur la volatilité de l’inflation dans les pays en développement," Journal of Academic Finance, RED research unit, university of Gabes, Tunisia, vol. 7(1), June.

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    More about this item

    Keywords

    Fiscal Policy; Policy-making; deficit;
    All these keywords.

    JEL classification:

    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

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