Legislative Term Limits and Government Spending: Theory and Evidence from the United States

Yasushi Asako (), Tetsuya Matsubayashi and Ueda Michiko ()
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Ueda Michiko: Department of Political Science, Syracuse University, 100 Eggers Hall, Syracuse, NY 13210, United States of America

The B.E. Journal of Economic Analysis & Policy, 2016, vol. 16, issue 3, 1501-1538

Abstract: What are the fiscal consequences of legislative term limits? To answer this question, we first develop a legislative bargaining model that describes negotiations over the allocation of distributive projects among legislators with different levels of seniority. Building on several predictions from the model, we develop two hypotheses for empirical testing. First, the adoption of term limits that results in a larger reduction in the variance of seniority within a legislature increases the amount of government spending. Second, legislatures that adopt stricter term limits increase the amount of government spending, while legislatures that adopt moderate term limits show no change in the amount. We provide evidence for these hypotheses using panel data for 49 US state legislatures between 1980 and 2010.

Keywords: legislature; seniority; term limits; government spending; elections (search for similar items in EconPapers)
JEL-codes: C72 D72 H72 (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1515/bejeap-2015-0216

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