The political economy of government size

Tridimas, George; Winer, Stanley L.

doi:10.1016/j.ejpoleco.2004.11.003

Cited by 59 publications

(38 citation statements)

References 45 publications

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“…However, as Tridimas and Winer (2005) or Besley and Case (2003) emphasize, these approaches somewhat ignore the impact of constitutional and institutional structures on fiscal policy outcomes. 2 Only recently have the constitutional differences between majoritarian and proportional representation systems or between presidential and parliamentarian systems (Persson and Tabellini 2000, Milesi-Ferretti, Perotti and Rostagno 2002, but also those between direct and representative democracies (Feld and Kirchgässner 2001a, Feld and Matsusaka 2003, Matsusaka 1995, 2004 been studied in comparative political economics.…”

Section: Introductionmentioning

confidence: 99%

“…There is also an earlier time series analysis by Kirchgässner and Pommerehne (1997) for all three go-2. Tridimas and Winer (2005) underline the additional importance of political influence without discussing however constitutional or institutional structures either.…”

Section: Introductionmentioning

confidence: 99%

“…The political economy of government size (Tridimas and Winer 2005) attributes the factors shaping fiscal policy to the demand and supply side. Thus, Peacock and Wiseman's (1961) displacement effect results from an extraordinary demand for government expenditure during a crisis.…”

Section: Introductionmentioning

confidence: 99%

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Political stability and fiscal policy: time series evidence for the Swiss federal level since 1849

Feld

Schaltegger

2010

Public Choice

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract This paper explores the role of political stability on fiscal policy choices in a time-series analysis over 158 years on the Swiss federal level. We argue that the fiscal-commons problem of public finances is affected by the time-horizon of a finance minister. Arguably, the incentives for an incumbent to maintain a good reputation with sound policy decisions are stronger the longer the time-horizon of a respective term. In addition, a finance minister who succeeds to stay a long time in office normally enjoys a politically powerful position towards the parliament, the administration and the interest groups to influence policy decisions. In contrast, frequent government turnover weakens the position of the finance minister. Terms of use: Documents in EconStor mayJEL Code: H11, H50, H61, D78.Keywords: political stability, fiscal policy, constitutional changes. Birthday, April 18-19, 2008 at Schloss Wartensee (Switzerland) and of the Annual Meeting of the European Public Choice Society, April 2-5, 2009 in Athens (Greece).-2 - IntroductionIn 1918, Schumpeter (1918, [1953, p. 5) contended that people's nature, its cultural achieve- -4 -vernment levels in Switzerland and for Germany from 1961 to 1987. They include political variables in addition to characteristics of demand and supply for government activity and socio-demographic controls. However, they do not look at institutional factors such as proportional representation or direct democracy and the time period they study is too short to investigate short-run and long-run effects in a differentiated way. 3This paper contributes to the political economy of fiscal policy using time series data for the Swiss federal level. In contrast to previous analyses, the data set extends from the creation of the Swiss constitution in 1849 until 2007. It thus covers the full time period with many historical events that need to be captured in addition to economic and socio-demographic factors.Moreover, the long time series allows us to investigate potential short-run and long-run relations between the economic and fiscal variables. Our main research interest, however, consists in testing the hypothesis whether political stability induces sound fiscal policies in the longrun. Political stability is mainly captured by the time horizon of the finance minister, but is evaluated against the background of exogenous shocks like the two world wars or the Great Depression and constitutional changes like the switch to pr...

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Political stability and fiscal policy: time series evidence for the Swiss federal level since 1849

Feld

Schaltegger

2010

Public Choice

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“…The interdependence between the excess burden of taxation and rent seeking implies, quite generally, greater social benefit from diminished political discretion to assign rents in both high and low-income countries. 23 For influences on the size of government, see Tridimas and Winer (2005) and Hillman (2009, chapter 10). Facchini and Melki (2013) provide an example of empirical compution of the efficient size of government.…”

Section: Insitutions and Political Discretionmentioning

confidence: 99%

Rent seeking and the excess burden of taxation

Kahana

Klunover

2014

European Journal of Political Economy

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Rent Seeking and the Excess Burden of Taxation *The social costs of rent seeking are generally evaluated with respect to rent dissipation. A common assumption is complete rent dissipation so that the value of a contested rent is the value of social loss. When rent seekers earn taxable income, there is interdependence between the social cost of rent seeking through rent dissipation and the excess burden of taxation. Through the addition of substitution to rent seeking beyond leisure, rent seeking increases the excess burden of taxation under risk neutrality when leisure is non-inferior. We derive a condition for rent seeking to increase the excess burden of taxation under risk aversion. Our conclusion is that, when rent seekers can earn taxable income, rent seeking is more socially costly than is inferred from contest models alone, because of an increased excess burden of taxation. JEL Classification:H2

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“…Finally, there are papers that look at the theory alone, and review the reasons why the process we observe seems to produce different outcomes from that which a simple model posits (Harns and Zink, 2003;Tridimas and Winer, 2005).…”

Section: Introductionmentioning

confidence: 99%