Budgetary Separation of Powers in the American States and the Tax Level: A Regression Discontinuity Design

Leandro M. 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: Should the Federal government and the remaining American states adopt the line item veto? What are its effects? We use regression discontinuity design to claim that in states with the line item veto, divided government has a causal negative effect on the tax level. By investigating a panel of 38 American states from 1960 to 2006, we estimate a significant discontinuous increase of 13% in the tax level as the party affiliated with the Governor in the state Legislature switches from being the minority party to being the majority. In the nine states that have block veto, we find no significant discontinuity in the tax level. We also find little evidence to suggest that the partisan identity of the majority party in the Legislature has a causal effect on the state tax level.

Keywords: Separation of powers; line item veto; tax level; regression discontinuity; nonparametric (search for similar items in EconPapers)
JEL-codes: H00 H11 H20 H30 H71 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2009-10
New Economics Papers: this item is included in nep-cdm and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.bristol.ac.uk/cmpo/publications/papers/2009/wp225.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.bristol.ac.uk/cmpo/publications/papers/2009/wp225.pdf [302 Moved Temporarily]--> https://www.bristol.ac.uk/cmpo/publications/papers/2009/wp225.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:bri:cmpowp:09/225

Access Statistics for this paper

More papers in The Centre for Market and Public Organisation from The Centre for Market and Public Organisation, University of Bristol, UK Contact information at EDIRC.
Bibliographic data for series maintained by ().