IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Estimating Government Discretion in Fiscal Policy Making

Listed author(s):
  • Alexander Herzog


    (New York University)

  • Slava Mikhaylov


    (London School of Economics, Institute for International Integration Studies, Trinity College Dublin)

Registered author(s):

    Varieties of Capitalism (VoC) is a relatively new approach to describe macroeconomic differences across countries, classifying them into coordinated market economies (CMEs) and liberal market economies (LMEs). VoC already had a significant impact on the field but has been criticised for its lack of linkage to political systems. Recent studies focused on the similarities between CMEs and the Lijphartian consensus political systems, and LMEs and majoritarian political systems. One of the practical consequences of this classification is that governments in LMEs should enjoy more discretion over fiscal policy while governments in CMEs are more constrained in their decisions. In this paper we evaluate this proposition in two LME states -- Ireland and the UK -- where the latter is an example of a pure majoritarian state while the former bares several institutional characteristics of the consensus state (e.g. electoral system and coalition governments). We show that governments in both states enjoy relatively high degrees of discretion over fiscal policy, but that in Ireland policy outcomes are more well balanced in respect to interests represented by social partners. We thus provide empirical evidence that supports the classification proposed in the VoC approach. However, we also demonstrate that the context of decision-making has a crucial impact on the discretionary power of government, and that such context effects can change over time, even within the same system type.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Paper provided by IIIS in its series The Institute for International Integration Studies Discussion Paper Series with number iiisdp339.

    in new window

    Length: 39 pages
    Date of creation: Jul 2010
    Date of revision: Jul 2010
    Handle: RePEc:iis:dispap:iiisdp339
    Contact details of provider: Postal:

    Phone: 00 353 1 896 3888
    Fax: 00 353 1 896 3939
    Web page:

    More information through EDIRC

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    in new window

    1. Grimmer, Justin, 2010. "A Bayesian Hierarchical Topic Model for Political Texts: Measuring Expressed Agendas in Senate Press Releases," Political Analysis, Cambridge University Press, vol. 18(01), pages 1-35, December.
    2. Hall, Peter A. & Soskice, David (ed.), 2001. "Varieties of Capitalism: The Institutional Foundations of Comparative Advantage," OUP Catalogue, Oxford University Press, number 9780199247752.
    3. Hall, Peter A. & Gingerich, Daniel W., 2009. "Varieties of Capitalism and Institutional Complementarities in the Political Economy: An Empirical Analysis," British Journal of Political Science, Cambridge University Press, vol. 39(03), pages 449-482, July.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:iis:dispap:iiisdp339. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Colette Keleher)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.