The effects of constitutional restraints on governmental spending

Fiscal Policy in the American States

“…The unique social, economic, political, and demographical conditions of the American states result in spending policies that are quite distinct from one another (Abrams and Dougan, 1986;Lowry 1994, 2000;Bohn and Inman, 1996;Cnudde and McCrone, 1969;Cox and McCubbins, 1991;Dawson and Robinson 1963;Merrifield 2000;Peterson, 1995;Tompkins 1975). Unlike the case for the federal government, residents of states have higher levels of mobility to choose a state of residence that satisfies their preferences of public goods the best to move to (Allard and Danziger, 2000;Bailey, 2005;DeHoog, Lower, and Lyons, 1990;Hawkins, 1992;Lowery and Lyons, 1989;Lyons and Lowery, 1989;Lyons, Lowery, and deHoog, 1992;Percy and Hawkins, 1992;Peterson and Rom, 1990;Schram, Nitz, and Krueger, 1998;Tiebout, 1956).…”

“…Given the market-like conditions created by the U.S. federal system, it is likely that public preferences exert a stronger influence on state spending policy. State expenditure policy can also be influenced by federal government spending such as federal aid (Bae and Feiock, 2004;Abrams and Dougan, 1986;Chubb, 1985;Osman 1966;Pogue and Sgontz 1968) or by spending in neighboring states (Baicker, 2005).…”

“…States differ in the magnitude of their tax and revenue pools from which the resources to support state spending are drawn. Hence when the tax capacity or the level of taxable income of a state increases, there is often public or elite demand for greater public consumption, which leads to a higher level of state spending (Abrams and Dougan, 1986). Economic growth increases the revenue pool but decreases the need for greater spending, while economic contraction and high unemployment can result in decreased or stagnant revenue levels but increased demand for public expenditure.…”

Budget institutions and political insulation: why states adopt the item veto

“…4 Rather than attempt to adjudicate between the two conflicting results on the budgetary effects of the item veto, I operationalize hypotheses based on both. The hypotheses broadly fall into three explanatory categories: static ideological (or partisan) preferences which holds that political parties adopt the item veto as a way to induce policies that they prefer; "efficiency" concerns which holds that states are more likely to adopt the item veto when the fiscal commons problem is most severe; and dynamic ideological or insulation concerns which holds that parties with a tenuous hold on power use the item veto as 3 See also Abrams and Dougan 1986;Rowley, Shughart, and Tollison 1987;Crain and Miller 1990;Carter and Schap 1990. It is worth noting that this stream of the literature does not maintain that budgets are always reduced, but only under certain conditions.…”

Local Fiscal Strategies in the Netherlands: An Empirical Analysis

“…Indeed, there is substantial empirical evidence that the political composition of the local (as well as central) government is correlated with tax rate levels as is evidenced by, for example, Abrams and Dougan (1986), Allers et al (2001), Ashworth and Heyndels (1997), Borge (1995), Merrifield (2000) and Reid (1998). These studies found a positive correlation between the level of tax rates and the relative strength of left-wing parties in (local) government.…”