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Fiscal Policy, Legislature Size, and Political Parties: Evidence From State and Local Governments in the First Half of the 20th Century

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  • Gilligan, Thomas W.
  • Matsusaka, John G.

Abstract

This paper tests whether state and local fiscal policy depended on the number of seats in the legislature in the first half of the 20th century. We find that large legislatures spent more, as implied by the "Law of 1/n" from the fiscal commons/logrolling literature. The same relation appears in the latter half of the century, and therefore seems to be systematic. We also find--again consistent with postwar evidence--that only the size of the upper house was important. We are unable to find robust evidence that expenditure depended on the partisan makeup of the legislature.

Suggested Citation

  • Gilligan, Thomas W. & Matsusaka, John G., 2001. "Fiscal Policy, Legislature Size, and Political Parties: Evidence From State and Local Governments in the First Half of the 20th Century," National Tax Journal, National Tax Association;National Tax Journal, vol. 54(1), pages 57-82, March.
  • Handle: RePEc:ntj:journl:v:54:y:2001:i:1:p:57-82
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    References listed on IDEAS

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    1. Poterba, James M, 1994. "State Responses to Fiscal Crises: The Effects of Budgetary Institutions and Politics," Journal of Political Economy, University of Chicago Press, vol. 102(4), pages 799-821, August.
    2. Gilligan, Thomas W & Matsusaka, John G, 1995. "Deviations from Constituent Interests: The Role of Legislative Structure and Political Parties in the States," Economic Inquiry, Western Economic Association International, vol. 33(3), pages 383-401, July.
    3. Crain, W Mark & Muris, Timothy J, 1995. "Legislative Organization of Fiscal Policy," Journal of Law and Economics, University of Chicago Press, vol. 38(2), pages 311-333, October.
    4. Bradbury, John Charles & Crain, W. Mark, 2001. "Legislative organization and government spending: cross-country evidence," Journal of Public Economics, Elsevier, vol. 82(3), pages 309-325, December.
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