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Legislative Term Limits and Government Spending: Theory and Evidence from the United States

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  • Asako Yasushi

    (Faculty of Political Science and Economics, Waseda University, 1-6-1 Nishi-Waseda, Shinjuku-ku, Tokyo 169-8050, Japan)

  • Matsubayashi Tetsuya

    (Osaka School of International Public Policy, Osaka University, 1–31 Machikaneyama, Toyonaka, Osaka 560-0043, Japan)

  • Ueda Michiko

    (Department of Political Science, Syracuse University, 100 Eggers Hall, Syracuse, NY 13210, United States of America)

Abstract

What are the fiscal consequences of legislative term limits? To answer this question, we first develop a legislative bargaining model that describes negotiations over the allocation of distributive projects among legislators with different levels of seniority. Building on several predictions from the model, we develop two hypotheses for empirical testing. First, the adoption of term limits that results in a larger reduction in the variance of seniority within a legislature increases the amount of government spending. Second, legislatures that adopt stricter term limits increase the amount of government spending, while legislatures that adopt moderate term limits show no change in the amount. We provide evidence for these hypotheses using panel data for 49 US state legislatures between 1980 and 2010.

Suggested Citation

  • Asako Yasushi & Matsubayashi Tetsuya & Ueda Michiko, 2016. "Legislative Term Limits and Government Spending: Theory and Evidence from the United States," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(3), pages 1501-1538, September.
    • Handle: RePEc:bpj:bejeap:v:16:y:2016:i:3:p:1501-1538:n:8
    DOI: 10.1515/bejeap-2015-0216
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    1. H. Erler, 2007. "Legislative term limits and state spending," Public Choice, Springer, vol. 133(3), pages 479-494, December.
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    More about this item

    Keywords

    legislature; seniority; term limits; government spending; elections;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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