Fiscal Transparency, Gubernatorial Popularity, and the Scale of Government: Evidence from the States
We explore the effect of transparency of fiscal institutions on the scale of government and gubernatorial popularity using a formal model of accountability. We construct an index of fiscal transparency for the American states from detailed budgetary information. With cross-section data for 1986-1995, we find that - on average and controlling for other influential factors - fiscal transparency increases both the scale of government and gubernatorial popularity. The results, subjected to extensive robustness checks, imply that more transparent budget institutions induce greater effort by politicians, to which voters give higher job approval, on average. Voters also respond by entrusting greater resources to politicians where insittutions are more transparent, leading to larger size of government.
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- Matsusaka, John G, 1995. "Fiscal Effects of the Voter Initiative: Evidence from the Last 30 Years," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 587-623, June.
- Timothy Besley & Stephen Coate, 2000.
"Issue Unbundling via Citizens' Initiatives,"
NBER Working Papers
8036, National Bureau of Economic Research, Inc.
- Besley, Timothy & Case, Anne, 1995.
"Does Electoral Accountability Affect Economic Policy Choices? Evidence from Gubernatorial Term Limits,"
The Quarterly Journal of Economics,
MIT Press, vol. 110(3), pages 769-98, August.
- Timothy Besley & Anne Case, 1993. "Does Electoral Accountability Affect Economic Policy Choices? Evidence from Gubernatorial Term Limits," NBER Working Papers 4575, National Bureau of Economic Research, Inc.
- Jeffrey Zax, 1989. "Initiatives and government expenditures," Public Choice, Springer, vol. 63(3), pages 267-277, December.
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