Discretional political budget cycles and separation of powers
Jorge Streb (),
Daniel Lema () and
No 286, CEMA Working Papers: Serie Documentos de Trabajo. from Universidad del CEMA
In contrast to previous empirical work on electoral cycles, which implicitly assumes the executive has full discretion over fiscal policy, this paper contends that under separation of powers an unaligned legislature may have a moderating role. Focusing on the budget surplus, we find that stronger effective checks and balances explain why cycles are weaker in developed and established democracies. Once the discretional component of executive power is isolated, there are significant cycles in all democracies. Whether the political system is presidential or parliamentary, or the electoral rules are majoritarian or proportional, does not change the basic results.
Keywords: political budget cycles; asymmetric information; discretion; separation of powers; checks and balances; veto players; rule of law (search for similar items in EconPapers)
JEL-codes: D72 D78 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mic and nep-pol
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Journal Article: Checks and Balances on Political Budget Cycles: Cross‐Country Evidence (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:cem:doctra:286
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