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Political Bias in Fiscal Policy Formation: an Econometric Analysis of Coalition Systems

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Author Info
Fabrizio Carmignani () (Department of Economics, University of Milan-Bicocca and Department of Economics, University of Glasgow)
Abstract

This paper provides a comprehensive econometric analysis of some debated issues concerning the political and institutional determinants of fiscal policy outcomes. Several innovative results are obtained. It turns out that a significant effect on fiscal policy formation can be traced back to the ideological orientation of the policymaker, to the degree of cabinet instability, to cross-country differences in electoral and budgetary institutions and to the dispersion of political power within the ruling coalition. Instead, the preferences of the median voter appear to have little importance. The evidence also rejects the theory of fiscal illusion in decision-making.

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File URL: http://dipeco.economia.unimib.it/repec/pdf/mibwpaper28.pdf
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File Function: First version, 2000
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Publisher Info
Paper provided by University of Milano-Bicocca, Department of Economics in its series Working Papers with number 28.

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Length: 33 pages
Date of creation: Dec 2000
Date of revision: Dec 2000
Handle: RePEc:mib:wpaper:28

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Related research
Keywords: Fiscal Policy; Policy-making; deficit;

Find related papers by JEL classification:
H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

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    Other versions:
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  19. Alesina, Alberto & Tabellini, Guido, 1990. "A Positive Theory of Fiscal Deficits and Government Debt," Review of Economic Studies, Blackwell Publishing, vol. 57(3), pages 403-14, July. [Downloadable!] (restricted)
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