The paper presents empirical findings regarding the economic policy consequences of constitutional arrangements, in three different dimensions. First, the data are consistent with several theoretical predictions about the consequences of electoral rules and forms of government for fiscal policy and rent extraction, even when non-random constitution selection is taken into account. Second, empirical tests of the predictions from a new comprehensive model of parliamentary democracy show that proportional elections raise government spending through their indirect consequences for party structures and types of government, rather than through their direct effects on policymaking incentives. Third, new empirical results suggest that constitutional arrangements may have important consequences for structural polices that promote long-run economic performance, hinting at a missing link in the causal chain from history to current economic performance. All these empirical findings appear statistically robust, and the estimated effects are large enough to be of genuine economic interest.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
10170.
Length: Date of creation: Dec 2003 Date of revision: Handle: RePEc:nbr:nberwo:10170
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Find related papers by JEL classification: D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
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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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