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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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Article provided by Elsevier in its journal European Journal of Political Economy.

Volume (Year): 32 (2013)
Issue (Month): C ()
Pages: 356-376

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Handle: RePEc:eee:poleco:v:32:y:2013:i:c:p:356-376
DOI: 10.1016/j.ejpoleco.2013.09.009
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505544

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

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Find related papers by 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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Cited by:

  1. Saarimaa, Tuukka & Tukiainen, Janne, 2015. "Common pool problems in voluntary municipal mergers," European Journal of Political Economy, Elsevier, vol. 38(C), pages 140-152.
  2. 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.
  3. 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.
  4. Thushyanthan Baskaran & Zohal Hessami, 2014. "Political alignment and intergovernmental transfers in parliamentary systems: Evidence from Germany," Working Paper Series of the Department of Economics, University of Konstanz 2014-17, Department of Economics, University of Konstanz.
  5. 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.
  6. Schaltegger, Christoph A. & Weder, Martin, 2014. "Austerity, inequality and politics," European Journal of Political Economy, Elsevier, vol. 35(C), pages 1-22.
  7. 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.
  8. Dilla, Diana, 2017. "Staatsverschuldung und Verschuldungsmentalität
    [Public Debt and Debt Mentality]    ," MPRA Paper 79432, University Library of Munich, Germany.
  9. 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.
  10. R. Aytimur, 2014. "Importance of status quo when lobbying a coalition government," Economics of Governance, Springer, vol. 15(3), pages 203-219, August.
  11. J. Atsu Amegashie & Michael Batu, 2015. "Wider Boundaries: The Welfare State and International Remittances," CESifo Working Paper Series 5456, CESifo Group Munich.

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