PERSISTENT IDEOLOGY AND THE DETERMINATION OF PUBLIC POLICY OVER TIME

Zheng Song ()

International Economic Review, 2012, vol. 53, issue 1, 175-202

Abstract: This article investigates how public policy responds to persistent ideological shifts in dynamic politico‐economic equilibria. To this end, I develop a tractable model to analyze the dynamic interactions among public policy, individuals’ intertemporal choice, and the evolution of political constituency. My main finding is that a right‐wing ideology may increase the size of government. Data from a panel of 18 OECD countries confirm that after controlling for the partisan effect, there is a positive relationship between the right‐wing political constituency and government size. This is consistent with my theoretical prediction, but hard to explain by existing theories.

Date: 2012
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