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Abstract

This paper explores the role of political stability on fiscal policy choices in a time-series ana-lysis 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 parlia-ment, the administration and the interest groups to influence policy decisions. In contrast, fre-quent government turnover weakens the position of the finance minister.

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File URL: http://hdl.handle.net/10.1007/s11127-010-9677-7
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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 144 (2010)
Issue (Month): 3 (September)
Pages: 505-534

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Handle: RePEc:kap:pubcho:v:144:y:2010:i:3:p:505-534

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Web page: http://www.springerlink.com/link.asp?id=100332

Related research

Keywords: Constitutional changes; Fiscal policy; Political stability; Strong finance minister; H11; H50; H61; D78;

Other versions of this item:

Find related papers by JEL classification:

• D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
• H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
• H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
• H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems

References

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Cited by:

1. Michael Funke & Marc Gronwald, 2009. "A Convex Hull Approach to Counterfactual Analysis of Trade Openness and Growth," CESifo Working Paper Series 2692, CESifo Group Munich.
   
   • Michael Funke & Marc Gronwald, 2009. "A Convex Hull Approach to Counterfactual Analysis of Trade Openness and Growth," Quantitative Macroeconomics Working Papers 20906, Hamburg University, Department of Economics.
2. Moessinger, Marc-Daniel, 2012. "Do personal characteristics of finance ministers affect the development of public debt?," ZEW Discussion Papers 12-068, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
3. Beate R. Jochimsen & Sebastian Thomasius, 2012. "The Perfect Finance Minister: Whom to Appoint as Finance Minister to Balance the Budget?," Discussion Papers of DIW Berlin 1188, DIW Berlin, German Institute for Economic Research.

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