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Political stability and fiscal policy: time series evidence for the Swiss federal level since 1849

  • Lars Feld

    ()

  • Christoph Schaltegger

    ()

This paper explores the role of political stability on fiscal policy choices in a time-series ana-lysis over 158 years on the Swiss federal level. We argue that the fiscal-commons problem of public finances is affected by the time-horizon of a finance minister. Arguably, the incentives for an incumbent to maintain a good reputation with sound policy decisions are stronger the longer the time-horizon of a respective term. In addition, a finance minister who succeeds to stay a long time in office normally enjoys a politically powerful position towards the parlia-ment, the administration and the interest groups to influence policy decisions. In contrast, fre-quent government turnover weakens the position of the finance minister.

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Article provided by Springer in its journal Public Choice.

Volume (Year): 144 (2010)
Issue (Month): 3 (September)
Pages: 505-534

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Handle: RePEc:kap:pubcho:v:144:y:2010:i:3:p:505-534
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