Distributive Politics, Number of Parties, Ideological Polarization, and Bargaining Power

Abstract

We build a theoretical model that provides a previously unexplored way of addressing the spending-negotiation process between a governing party and the parties in a legislature, one that offers new insights as to how political fragmentation, ideological polarization, and bargaining power-as well as their interaction with one anotheraffect government spending. We show that the effects of both political fragmentation and ideological polarization on government spending are expected to exhibit systematic differences across regimes with different institutional features as pertain to the legislative budgeting process determining the balance of power between the governing party and the legislature. We also show that the effect of political fragmentation on government spending may be intermediated by the degree of ideological polarization. Our results allow us to better understand the existing empirical evidence and suggest new unexplored hypotheses that need to be addressed empirically. E conomists and political scientists have concerned themselves with how political fragmentation affects fiscal outcomes. The leading theory in this area follows from the common-pool problem (Weingast, Shepsle, and Johnsen 1981). The general argument is that when a pool of common resources is used to finance public projects with concentrated benefits, the result is overspending. Such overspending increases with the number of interested parties that have influence over government budgetrelated choices.Cross-country studies have analyzed whether public spending and/or budget deficits increase as the number of parties in the legislature increases. Most of these studies have concentrated on OECD democracies (Bawn and Rosenbluth 2006;Kontopoulos and Perotti 1999). They have found evidence supporting the idea that the number of parties in a legislature positively affects government spending. Interestingly however, for sets of countries including non-OECD countries, they have found that the number of parties has a weaker effect on spending (Elgie and McMenamin 2008;Mukherjee 2003;Woo 2003).A growing literature in political science and economics has shown that intrinsic institutional features related to the budget-negotiation process can be important in explaining these systematic differences (Alesina et al. 1999;Cheibub 2006;von Hagen and Harden 1995;Wehner 2010). In particular, von Hagen and Harden, studying a situation in which executive spending ministers agree on a budget bill, formally demonstrate that empowering ministers without portfolio promotes fiscal discipline and reduces government overspending caused by spending ministers' fiscal illusions. The main conclusion from this analysis, which has been informally generalized to all stages of the budgeting-negotiation process, is that the balance of power emerging from institutional aspects of the budgeting process has important effects on fiscal outcomes.In this article, we offer a theoretical model that provides a way, previously unexplored, of addressing the spending-negotiation process ...

Legislative Fragmentation and Government Spending in Presidential Democracies: Bringing Ideological Polarization into the Picture

“… A Nash solution is the simplest way to solve for the negotiation outcome. A more sophisticated solution, although with a similar result, can be found in Nupia ().…”

“…We follow Nupia () in extending the standard common‐pool framework to include a government that bargains with legislators to obtain their support for a public ideological policy in Congress. But because we are also interested in showing that the effect of fragmentation is not independent of the ideological distance between legislative parties, and later taking this idea to the data, our modeling of policy preferences differs from that in Nupia's article in ways that allow us to obtain predictions regarding this distance.…”

Political climate and regional well-being in Turkey

“…Le Maux et al (2011) demonstrate that effective political power and the degree of political fragmentation in France influence public spending depending on majority and opposition parties' ideological positions. Additionally, Nupia (2013) argues that polarization acts as a mediator while understanding the link between political fragmentation and government spending. These discussions confirm our concerns that clientelism and pork-barreling can be beyond the incumbent parties' political positions and political ideologies can be a vital dimension of distributive politics.…”

“…This paper, therefore, contributes to the existing literature in various ways. First, the extent of distributive politics is mostly investigated via party politics; however, a growing body of literature argues the importance of political views, ideologies, and extent of polarization for distributive politics (Le Maux et al, 2011;Nupia, 2013). Moreover, distributive politics is usually evaluated on monetary grounds via public expenditure and income distribution.…”

Of Distributive Politics and Pork Barrel System: Why Not Epistemic Governance Approach?

“…Pork barrel politics facilitates the vote trading that emerges in bringing about the legislative support of public policies. Second, and equally important, our framework allows us to study whether or not the balance of legislative power also intermediates the effect of ideological polarization on government spending (Nupia, 2013).…”