Does Electoral Accountability Affect Economic Policy Choices? Evidence from Gubernatorial Term Limits
This paper analyzes the behavior of U.S. governors from 1950 to 1986 to investigate a reputation-building model of political behavior. The authors argue that differences in the behavior of governors who face a binding term limit and those who are able to run again provides a source of variation in discount rates that can be used to test a political agency model. They find evidence that taxes, spending, and other policy instruments respond to a binding term limit if a Democrat is in office. The result is a fiscal cycle in term-limit states that lowers state income when the term limit binds. Copyright 1995, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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Volume (Year): 110 (1995)
Issue (Month): 3 (August)
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