Fragmented government effects on fiscal policy: new evidence
Volkerink, Bjørn and
Jacob de Haan
Additional contact information
Jacob de Haan: Groningen University
No 200006, CCSO Working Papers from University of Groningen, CCSO Centre for Economic Research
Abstract:
Most industrialized countries entered the 1980s with their public finances in disarray. At the time, persistent deficits pushed up public debt-to-GDP ratios. Despite such similarities, deficit spending varies substantially between countries and within countries over time. Recent theoretical and empirical research has considered how differences in political arrangements affecting national policy formation might explain variation in fiscal policies pursued. Using a panel of 22 OECD countries over the 1971-1996 period this paper extends previous literature on the effects of fragmented government on fiscal policy outcomes in various directions. First, we focus on data relating to central government instead of general government as all theories refer to central government. Second, not only do we analyze the effect of size fragmentation of government, we also examine government's position vis-à-vis parliament and government's political fragmentation. We find evidence that more fragmented government (defined in terms of the number of political parties in a coalition or the number of spending ministers) have higher deficits. There is also some evidence that governments that dispose of excess seats in parliament have lower deficits. Right-wing governments appear to have been fiscally more responsible in the seventies. Political fragmentation does not affect government's budget deficit.
Date: 2000
References: Add references at CitEc
Citations: View citations in EconPapers (16)
Downloads: (external link)
http://irs.ub.rug.nl/ppn/241226031 (application/pdf)
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:gro:rugccs:200006
Access Statistics for this paper
More papers in CCSO Working Papers from University of Groningen, CCSO Centre for Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Hanneke Tamling (h.g.tamling@rug.nl).