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American Economic Review Vol. 94 No. 1 2004

Constitutional Rules and Fiscal Policy Outcomes

Torsten Persson1; Guido Tabellini2

1 Institute for International Economic Studies, Stockholm University, S-106 91 Stockholm, Sweden, London School of Economics, CEPR, and NBER. · 2 IGIER, Università Bocconi, Via Salasco 3/5, Milan, Italy, CEPR, and Ces-Ifo.

Abstract

We investigate the effect of electoral rules and forms of government on fiscal policy outcomes in a large sample of democracies. We rely on different estimation methods to address prospective problems of statistical inference, due to nonrandom selection of these constitutional rules. The findings are consistent with our theoretical priors: presidential regimes induce smaller governments than parliamentary democracies, while majoritarian elections lead to smaller governments and smaller welfare programs than proportional elections.

DOI
10.1257/000282804322970689
Volume
94
Issue
1
Pages
25-45
Language
en
Sources
crossref bibtex:phds-export.bib openalex

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