We try to demonstrate how economists may engage in research on comparative politics, relating the size and composition of government spending to the political system. A Downsian model of electoral competition and forward-looking voting indicates that majoritarian---as opposed to proportional---elections increase competition between parties by focusing it into some key marginal districts. This leads to less public goods, less rents for politicians, more redistribution and larger government. A model of legislative bargaining and backward-looking voting indicates that presidential---as opposed to parliamentary---regimes increase competition between both politicians and voters. This leads to less public goods, less rents for politicians, less redistribution, and smaller government. We confront these predictions with cross-country data from around 1990, controlling for economic and social determinants of government spending. We find strong and robust support for the prediction that the size of government is smaller under presidential regimes, and weaker support for the prediction that majoritarian elections are associated with less public goods.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
2051.
Find related papers by JEL classification: H1 - Public Economics - - Structure and Scope of Government H4 - Public Economics - - Publicly Provided Goods
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Persson, Torsten & Roland , Gérard & Tabellini, Guido, 1997.
"Comparative Politics and Public Finance,"
Seminar Papers
633, Stockholm University, Institute for International Economic Studies.
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Torsten Persson & Gerard Roland & Guido Tabellini, .
"Comparative Politics and Public Finance,"
Working Papers
114, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
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Persson, Torsten & Tabellini, Guido, 2002.
"Political economics and public finance,"
Handbook of Public Economics,
in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 24, pages 1549-1659
Elsevier.
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