Fiscal Policy and the Democratic Process in the European Union

William Roberts Clark, Matt Golder and Sona Nadenichek Golder
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William Roberts Clark: New York University, USA william.clark@nyu.edu
Matt Golder: New York University, USA mrg217@nyu.edu
Sona Nadenichek Golder: New York University, USA sln202@nyu.edu

European Union Politics, 2002, vol. 3, issue 2, 205-230

Abstract: The construction of a monetary union with a single currency in Europe raises serious concerns for those who understand the democratic process as one in which social groups compete on different ideological programs. This is because it increasingly constrains national governments of different partisan hues to follow similar fiscal and monetary policies. Recent empirical studies indicate that these concerns might be somewhat misplaced since there is evidence that partisan convergence on macroeconomic policy predates these institutional developments. One problem with these studies, though, is that they fail to include the electoral system as a constraint on partisan behavior. Since electoral systems generate centripetal and centrifugal tendencies, we should expect to find strong evidence for partisan differences only where electoral rules encourage dispersion. We test this argument using data on fiscal policy from European Union countries between 1981 and 1992. We find that there is still no systematic evidence for partisan differences. Given this, it is hard to see how EMU can add to the democratic deficit in the European Union.

Keywords: electoral system; European Monetary Union; fiscal policy; partisan politics (search for similar items in EconPapers)
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:sae:eeupol:v:3:y:2002:i:2:p:205-230

DOI: 10.1177/1465116502003002004

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