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Separation of Powers and the Size of Government in the U.S. States

  • Leandro De Magalhães
  • Lucas Ferrero

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    According to our model effective 'budgetary' separation of power occurs in the states with the line-item veto when the Governor is not aligned with the Legislature. Only then is the Legislature, which approves the budget and sets the tax level, not the full residual claimant of a tax release. The tax level is determined by the overlap between the supporters of the Governor and the supporters of the legislative majority. The model generates a discontinuous and non-linear relationship between the tax level and the degree of alignment between Governor and Legislature. We find support in the data for this non-linear relationship and show that the discontinuity can be interpreted as a causal effect.

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    File URL: http://www.bristol.ac.uk/cmpo/publications/papers/2012/wp285.pdf
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    Paper provided by Department of Economics, University of Bristol, UK in its series The Centre for Market and Public Organisation with number 12/285.

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    Length: 41 pages
    Date of creation: Mar 2012
    Date of revision:
    Handle: RePEc:bri:cmpowp:12/285
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    2. Grossman, Gene M. & Helpman, Elhanan, 2008. "Separation of powers and the budget process," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 407-425, April.
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