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Presidential Address: Consequences of Constitutions

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  • Torsten Persson

    (Stockholm University, LSE, CEPR, and NBER,)

Abstract

The paper presents empirical findings regarding the economic policy consequences of constitutional arrangements, in three different dimensions. First, the data are consistent with several theoretical predictions about the consequences of electoral rules and forms of government for fiscal policy and rent extraction, even when non-random constitution selection is taken into account. Second, empirical tests of the predictions from a new comprehensive model of parliamentary democracy show that proportional elections raise government spending through their indirect consequences for party structures and types of government, rather than through their direct effects on policymaking incentives. Third, new empirical results suggest that constitutional arrangements may have important consequences for structural policies that promote long-run economic performance, hinting at a missing link in the causal chain from history to current economic performance. All these empirical findings appear statistically robust, and the estimated effects are large enough to be of genuine economic interest. (JEL: D72, E60, H00, O11) Copyright (c) 2004 The European Economic Association.

Suggested Citation

  • Torsten Persson, 2004. "Presidential Address: Consequences of Constitutions," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 139-161, 04/05.
  • Handle: RePEc:tpr:jeurec:v:2:y:2004:i:2-3:p:139-161
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Flachaire, Emmanuel & García-Peñalosa, Cecilia & Konte, Maty, 2014. "Political versus economic institutions in the growth process," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 212-229.
    3. Andreas Freytag & Sebastian Voll, 2013. "Institutions and savings in developing and emerging economies," Public Choice, Springer, vol. 157(3), pages 475-509, December.
    4. García-Peñalosa, Cecilia & Konte, Maty, 2014. "Why Are Women Less Democratic Than Men? Evidence from Sub-Saharan African Countries," World Development, Elsevier, vol. 59(C), pages 104-119.
    5. Aidt, T. & Dutta, J. & Vania Sena, 2005. "Growth, Governance and Corruption in the Presence of Threshold Effects: Theory and Evidence," Cambridge Working Papers in Economics 0540, Faculty of Economics, University of Cambridge.
    6. Justesen, Mogens K., 2012. "Democracy, dictatorship, and disease: Political regimes and HIV/AIDS," European Journal of Political Economy, Elsevier, vol. 28(3), pages 373-389.
    7. Cingolani, Luciana & Crombrugghe, Denis de, 2012. "Techniques for dealing with reverse causality between institutions and economic performance," MERIT Working Papers 034, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    8. Michael Breen & Robert Gillanders, 2012. "Corruption, institutions and regulation," Economics of Governance, Springer, pages 263-285.
    9. Baccini, Leonardo, 2012. "Democratization and trade policy: an empirical analysis of developing countries," LSE Research Online Documents on Economics 44924, London School of Economics and Political Science, LSE Library.

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • H00 - Public Economics - - General - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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