Separation of powers and the budget process
AbstractWe study budget formation in a model featuring separation of powers. In our model, the legislature designs a budget bill that can include a cap on total spending and earmarked allocations to designated public projects. Each project provides random benefits to one of many interest groups. The legislature can delegate spending decisions to an executive agency that can observe the productivity of all projects before choosing which to fund. However, the ruling coalition in the legislature and the executive serve different constituencies, so their interests are not perfectly aligned. We consider settings that differ in terms of the breadth and overlap in the constituencies of the two branches, and associate these with the political systems and circumstances under which they most naturally arise. Earmarks are more likely to occur when the executive serves broad interests, while a binding budget cap arises when the executive's constituency is more narrow than that of the powerful legislators.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Public Economics.
Volume (Year): 92 (2008)
Issue (Month): 3-4 (April)
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Web page: http://www.elsevier.com/locate/inca/505578
Other versions of this item:
- Grossman, Gene & Helpman, Elhanan, 2006. "Separation of Powers and the Budget Process," CEPR Discussion Papers 5745, C.E.P.R. Discussion Papers.
- Gene M. Grossman & Elhanan Helpman, 2006. "Separation of Powers and the Budget Process," Harvard Institute of Economic Research Working Papers 2119, Harvard - Institute of Economic Research.
- Gene M. Grossman & Elhanan Helpman, 2006. "Separation of Powers and the Budget Process," NBER Working Papers 12332, National Bureau of Economic Research, Inc.
- H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
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