The Political Economy of Fiscal Policy: An Experimental Study on the Strategic Use of Deficits
Field data on the strategic use of deficits to limit the budgetary scope of future governments are inconclusive about the effects of political polarization or a government's re-election probability on fiscal policy. Therefore, we designed a controlled experiment to examine the strategic use of deficits. Using a within-subjects design, we find that deficits rise with a higher degree of polarization and a lower reelection probability. However, in a between-subjects design neither polarization nor reelection probabilities have a systematic effect. We discuss the implications of our experimental results for empirical tests of the strategic use of deficits with field data. Copyright 2003 by Kluwer Academic Publishers
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ehrhart, Karl-Martin & Gardner, Roy & von Hagen, Jurgen & Keser, Claudia, 2007.
"Budget processes: Theory and experimental evidence,"
Games and Economic Behavior,
Elsevier, vol. 59(2), pages 279-295, May.
- Ehrhart, Karl-Martin & Gardner, Roy J & Keser, Claudia & von Hagen, Jürgen, 2001. "Budget Processes: Theory and Experimental Evidence," CEPR Discussion Papers 2661, C.E.P.R. Discussion Papers.
- Karl-Martin Ehrhart & Roy Gardner & Jürgen von Hagen & Claudia Keser, 1999. "Budget Processes: Theory and Experimental Evidence," CIRANO Working Papers 99s-33, CIRANO.
- Ehrhart, Karl-Martin & Gardner, Roy & von Hagen, Jürgen & Keser, Claudia, 2000. "Budget processes: Theory and experimental evidence," ZEI Working Papers B 18-2000, ZEI - Center for European Integration Studies, University of Bonn.
- Karl-Martin Ehrhart & Roy Gardner & Juergen von Hagen & Claudia Keser, 2006. "Budget Processes: Theory and Experimental Evidence," Caepr Working Papers 2006-009, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
- Ehrhart, Karl-Martin & Gardner, Roy & Hagen, Jürgen von & Keser, Claudia, 2006. "Budget Processes: Theory and Experimental Evidence," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 146, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Ehrhart, Karl-Martin & Gardner, Roy & von Hagen, Jürgen & Keser*, Claudia, 2004. "Budget Processes: Theory and Experimental Evidence," Sonderforschungsbereich 504 Publications 04-57, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
- Edin, P-A. & Ohlsson, H., 1990.
"Political Determinants Of Budget Deficits: Coalition Effects Versus Minority Effects,"
1990k, Uppsala - Working Paper Series.
- Edin, Per-Anders & Ohlsson, Henry, 1991. "Political determinants of budget deficits: Coalition effects versus minority effects," European Economic Review, Elsevier, vol. 35(8), pages 1597-1603, December.
- Alesina, Alberto & Tabellini, Guido, 1990.
"A Positive Theory of Fiscal Deficits and Government Debt,"
Review of Economic Studies,
Wiley Blackwell, vol. 57(3), pages 403-14, July.
- Tabellini, Guido & Alesina, Alberto, 1990. "A Positive Theory of Fiscal Deficits and Government Debt," Scholarly Articles 3612769, Harvard University Department of Economics.
- Crain, W. Mark & Tollison, Robert D., 1993. "Time inconsistency and fiscal policy : Empirical analysis of U.S. States, 1969-89," Journal of Public Economics, Elsevier, vol. 51(2), pages 153-159, June.
- Alberto Alesina & Guido Tabellini, 1988.
"Voting on the Budget Deficit,"
NBER Working Papers
2759, National Bureau of Economic Research, Inc.
- Guido Tabellini & Alberto Alesina, 1988. "Voting on the Budget Deficit," UCLA Economics Working Papers 539, UCLA Department of Economics.
- Tabellini, Guido & Alesina, Alberto, 1990. "Voting on the Budget Deficit," Scholarly Articles 4553030, Harvard University Department of Economics.
- Alesina, Alberto F & Tabellini, Guido, 1988. "Voting on the Budget Deficit," CEPR Discussion Papers 269, C.E.P.R. Discussion Papers.
- Volkerink, Bjorn & De Haan, Jakob, 2001. " Fragmented Government Effects on Fiscal Policy: New Evidence," Public Choice, Springer, vol. 109(3-4), pages 221-42, December.
- Milesi-Ferretti, Gian Maria, 1995. "The Disadvantage of Tying Their Hands: On the Political Economy of Policy Commitments," Economic Journal, Royal Economic Society, vol. 105(433), pages 1381-1402, November.
- Per Pettersson-Lidbom, 2001. "An Empirical Investigation of the Strategic Use of Debt," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 570-583, June.
- de Haan, Jakob & Sturm, Jan-Egbert, 1994. " Political and Institutional Determinants of Fiscal Policy in the European Community," Public Choice, Springer, vol. 80(1-2), pages 157-72, July.
- Huber, Gerald & Kocher, Martin & Sutter, Matthias, 2003.
" Government Strength, Power Dispersion in Governments and Budget Deficits in OECD-Countries: A Voting Power Approach,"
Springer, vol. 116(3-4), pages 333-50, September.
- Huber, Gerald & Kocher, Martin G. & Sutter, Matthias, 2003. "Government strength, power dispersion in governments and budget deficits in OECD-countries. A voting power approach," Munich Reprints in Economics 18164, University of Munich, Department of Economics.
- Alberto Alesina & Roberto Perotti, 1995. "The Political Economy of Budget Deficits," IMF Staff Papers, Palgrave Macmillan, vol. 42(1), pages 1-31, March.
- Milesi-Ferretti, Gian Maria & Spolaore, Enrico, 1994. "How cynical can an incumbent be? Strategic policy in a model of government spending," Journal of Public Economics, Elsevier, vol. 55(1), pages 121-140, September.
- Persson, Torsten & Svensson, Lars E O, 1989. "Why a Stubborn Conservative Would Run a Deficit: Policy with Time-Inconsistent Preferences," The Quarterly Journal of Economics, MIT Press, vol. 104(2), pages 325-45, May.
When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:116:y:2003:i:3-4:p:313-32. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.