No abstract

The budget forms the legal basis for government spending, and timely budgets, enacted before the new fiscal year, are an integral part of good governance. This paper examines the causes of late budgets using a unique dataset of budget completion dates for US state governments 1988–2007, constructed from news reports and state budget office surveys. We find 23 percent of state budgets to be late. We show that changing economic circumstances and divided government are the driving forces behind late budgets, which is consistent with a war-of-attrition bargaining model featuring budget baselines and preferences over deviations from such baselines. (JEL C78, D72, H61, H72)

No abstract

Legislative gridlock is a failure of one of the key functions of government: to pass legislation. Can voters counter such political dysfunction? This paper examines whether and how voters hold politicians accountable for gridlock. We focus on the passage of the government budget, the central task of any legislature, and define a legislature to experience budgetary gridlock if it fails to pass the budget on time. We argue, based on evidence from twenty years of budget enactment data, that voters hold state legislators accountable for budget gridlock in US state governments, with gridlocked incumbents losing their seat more often than incumbents passing budgets on time. Based on established theories of party organization in American politics, we develop three competing theoretical hypotheses to guide our understanding of the observed patterns of retrospective voting. We find strong support for collective electoral accountability with voters punishing incumbent members of state legislature majority parties.