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Coalition governments, cabinet size, and the common pool problem: Evidence from the German states

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  • Baskaran, Thushyanthan

Abstract

The theoretical literature on common pool problems in fiscal policy suggests that government fragmentation increases public expenditures. In parliamentary regimes, the fragmentation hypothesis refers to (i) coalition governments and (ii) cabinet size. This paper explores the effect of coalition governments and cabinet size on public expenditures with panel data covering all 16 German states over the period 1975–2010. Identification is facilitated by the large within-variation in the incidence of coalition governments and the size of the cabinet in the German states. In addition, I exploit a feature of state electoral laws to construct a credible instrument for the likelihood of coalition governments.

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  • Baskaran, Thushyanthan, 2013. "Coalition governments, cabinet size, and the common pool problem: Evidence from the German states," European Journal of Political Economy, Elsevier, vol. 32(C), pages 356-376.
    • Handle: RePEc:eee:poleco:v:32:y:2013:i:c:p:356-376
    DOI: 10.1016/j.ejpoleco.2013.09.009
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    Citations

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    Cited by:

    1. Florian Chatagny, 2015. "Incentive Effects of Fiscal Rules on the Finance Minister's Behaviour: Evidence from Revenue Projections in Swiss Cantons," CESifo Working Paper Series 5223, CESifo Group Munich.
    2. Thushyanthan Baskaran & Zohal Hessami, 2017. "Political alignment and intergovernmental transfers in parliamentary systems: evidence from Germany," Public Choice, Springer, vol. 171(1), pages 75-98, April.
    3. Halse, Askill H., 2016. "More for everyone: The effect of local interests on spending on infrastructure," European Journal of Political Economy, Elsevier, vol. 43(C), pages 41-56.
    4. Saarimaa, Tuukka & Tukiainen, Janne, 2015. "Common pool problems in voluntary municipal mergers," European Journal of Political Economy, Elsevier, vol. 38(C), pages 140-152.
    5. Dilla, Diana, 2017. "Staatsverschuldung und Verschuldungsmentalität
      [Public Debt and Debt Mentality]      ," MPRA Paper 79432, University Library of Munich, Germany.
    6. Chatagny, Florian, 2015. "Incentive effects of fiscal rules on the finance minister's behavior: Evidence from revenue projections in Swiss Cantons," European Journal of Political Economy, Elsevier, vol. 39(C), pages 184-200.
    7. R. Aytimur, 2014. "Importance of status quo when lobbying a coalition government," Economics of Governance, Springer, vol. 15(3), pages 203-219, August.
    8. repec:spr:eujhec:v:20:y:2019:i:3:d:10.1007_s10198-018-1010-2 is not listed on IDEAS
    9. repec:kap:pubcho:v:175:y:2018:i:3:d:10.1007_s11127-018-0548-y is not listed on IDEAS
    10. Zohal Hessami, 2013. "Corruption, Public Procurement, and the Budget Composition: Theory and Evidence from OECD Countries," Working Paper Series of the Department of Economics, University of Konstanz 2013-27, Department of Economics, University of Konstanz.
    11. Schaltegger, Christoph A. & Weder, Martin, 2014. "Austerity, inequality and politics," European Journal of Political Economy, Elsevier, vol. 35(C), pages 1-22.
    12. Hessami, Zohal, 2014. "Political corruption, public procurement, and budget composition: Theory and evidence from OECD countries," European Journal of Political Economy, Elsevier, vol. 34(C), pages 372-389.
    13. Lopes da Fonseca, Mariana, 2015. "Political determinants of municipal accounts: Quasi-experimental evidence from Portugal," Center for European, Governance and Economic Development Research Discussion Papers 238, University of Goettingen, Department of Economics.
    14. repec:eee:ecmode:v:70:y:2018:i:c:p:571-578 is not listed on IDEAS
    15. J. Atsu Amegashie & Michael Batu, 2015. "Wider Boundaries: The Welfare State and International Remittances," CESifo Working Paper Series 5456, CESifo Group Munich.

    More about this item

    Keywords

    Government fragmentation; Common pool problems; Coalition government; Cabinet size; Public expenditures;

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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