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Political Stability and Fiscal Policy - Time Series Evidence for the Swiss Federal Level since 1849

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  • Lars P. Feld
  • Christoph A. Schaltegger

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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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2691.

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Date of creation: 2009
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Handle: RePEc:ces:ceswps:_2691

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Keywords: political stability; fiscal policy; constitutional changes;

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Citations

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Cited by:
  1. Lars P. Feld, 2010. "Sinnhaftigkeit und Effektivität der deutschen Schuldenbremse," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 11(3), pages 226-245, 08.
  2. 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.
  3. Heinemann, Friedrich & Janeba, Eckhard & Moessinger, Marc-Daniel & Schröder, Christoph, 2013. "Revenue Autonomy Preference in German State Parliaments," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79736, Verein für Socialpolitik / German Economic Association.
  4. 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.
  5. 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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