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Are we all playing the same game? The economic effects of constitutions depend on the degree of institutionalization

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  • Caruso, Germán
  • Scartascini, Carlos
  • Tommasi, Mariano

Abstract

This paper addresses an important source of variation within democracies — the degree of institutionalization. The concept of institutionalization describes the extent to which politics takes place, and is believed to take place, via formal political institutions. Countries vary in their degree of institutionalization, hence, in the degree to which political actors pursue their goals via conventional politics or via “alternative political technologies”. This paper postulates that if politics is conducted largely outside of formal channels, the structure of the formal channels should not matter much as a determinant of policy outcomes. To address this issue this paper proposes a new index of institutionalization and with it revisits seminal work regarding the impact of constitutions on public spending. The findings show that the effect of constitutional rules on policy outcomes is conditional on the degree of institutionalization.

Suggested Citation

  • Caruso, Germán & Scartascini, Carlos & Tommasi, Mariano, 2015. "Are we all playing the same game? The economic effects of constitutions depend on the degree of institutionalization," European Journal of Political Economy, Elsevier, vol. 38(C), pages 212-228.
  • Handle: RePEc:eee:poleco:v:38:y:2015:i:c:p:212-228
    DOI: 10.1016/j.ejpoleco.2015.02.007
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    References listed on IDEAS

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    1. Rockey, James, 2012. "Reconsidering the fiscal effects of constitutions," European Journal of Political Economy, Elsevier, vol. 28(3), pages 313-323.
    2. Fabiana Machado & Carlos Scartascini & Mariano Tommasi, 2011. "Political Institutions and Street Protests in Latin America," Journal of Conflict Resolution, Peace Science Society (International), vol. 55(3), pages 340-365, June.
    3. Torsten Persson & Gerard Roland & Guido Tabellini, 2000. "Comparative Politics and Public Finance," Journal of Political Economy, University of Chicago Press, vol. 108(6), pages 1121-1161, December.
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    5. Fumagalli, Eileen & Narciso, Gaia, 2012. "Political institutions, voter turnout, and policy outcomes," European Journal of Political Economy, Elsevier, vol. 28(2), pages 162-173.
    6. Caner, Mehmet & Hansen, Bruce E., 2004. "Instrumental Variable Estimation Of A Threshold Model," Econometric Theory, Cambridge University Press, vol. 20(05), pages 813-843, October.
    7. Carlos Scartascini & Mariano Tommasi, 2009. "The Making of Policy: Institutionalized or Not?," Research Department Publications 4644, Inter-American Development Bank, Research Department.
    8. Aidt, Toke & Dutta, Jayasri & Sena, Vania, 2008. "Governance regimes, corruption and growth: Theory and evidence," Journal of Comparative Economics, Elsevier, vol. 36(2), pages 195-220, June.
    9. Pablo T. Spiller & Ernesto H. Stein & Mariano Tommasi & Carlos Scartascini & Lee J. Alston & Marcus André Melo & Bernardo Mueller & Carlos Pereira & Cristóbal Aninat & John Londregan & Patricio Navia , 2008. "Policymaking in Latin America: How Politics Shapes Policies," IDB Publications (Books), Inter-American Development Bank, number 40178 edited by Ernesto H. Stein & Mariano Tommasi & Pablo T. Spiller & Carlos Scartascini, February.
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    19. Carlos Scartascini & Ernesto Stein & Mariano Tommasi, 2013. "Political institutions, intertemporal cooperation, and the quality of public policies," Journal of Applied Economics, Universidad del CEMA, vol. 16, pages 1-32, May.
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    Citations

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    Cited by:

    1. María Franco Chuaire & Carlos Scartascini & Mariano Tommasi, 2017. "State capacity and the quality of policies. Revisiting the relationship between openness and government size," Economics and Politics, Wiley Blackwell, vol. 29(2), pages 133-156, July.
    2. Maria Franco & Carlos Scartascini & Mariano Tommasi, 2014. "State Capacity and the Quality of Policies: Revisiting the Relationship between Openness and the Size of Government," IDB Publications (Working Papers) 86254, Inter-American Development Bank.
    3. Mariano Tommasi & Germán Caruso & Carlos Scartascini, 2014. "Are We Playing the Same Game? The Economic Effects of Constitutions Depend on the Degree of Institutionalization," Working Papers 116, Universidad de San Andres, Departamento de Economia, revised Dec 2014.

    More about this item

    Keywords

    Political economy; Institutionalization; Political institutions; Government expenditure; Alternative political technologies;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H10 - Public Economics - - Structure and Scope of Government - - - General

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