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Political Stability and Fiscal Policy - Time Series Evidence for the Swiss Federal Level since 1849

  • Lars P. Feld
  • Christoph A. 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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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2009/wp-cesifo-2009-06/cesifo1_wp2691.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2691.

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Date of creation: 2009
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Handle: RePEc:ces:ceswps:_2691
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