Separation of Powers and the Size of Government in the U.S. States

Leandro De Magalhães and Lucas Ferrero ()

The Centre for Market and Public Organisation from The Centre for Market and Public Organisation, University of Bristol, UK

Abstract: According to our model effective 'budgetary' separation of power occurs in the states with the line-item veto when the Governor is not aligned with the Legislature. Only then is the Legislature, which approves the budget and sets the tax level, not the full residual claimant of a tax release. The tax level is determined by the overlap between the supporters of the Governor and the supporters of the legislative majority. The model generates a discontinuous and non-linear relationship between the tax level and the degree of alignment between Governor and Legislature. We find support in the data for this non-linear relationship and show that the discontinuity can be interpreted as a causal effect.

Keywords: Separation of powers; divided government; line-item veto; tax level; semiparametric; regression discontinuity design (search for similar items in EconPapers)
JEL-codes: H00 H11 H20 H30 H71 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2012-03
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Persistent link: https://EconPapers.repec.org/RePEc:bri:cmpowp:12/285

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