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Pick Your Poison: Do Politicians Regulate When They Can’t Spend?

  • Johnson, Noel D
  • Matthew, Mitchell
  • Yamarik, Steven

We investigate whether laws restricting fiscal policies across U.S. states lead politicians to adopt more partisan regulatory policy instead. We first show that partisan policy outcomes do exist across U.S. states, with Republicans cutting taxes and spending and Democrats raising them. We then demonstrate that these partisan policy outcomes are moderated in states with no-carry restrictions on public deficits. Lastly, we test whether unified Republican or Democratic state governments regulate more when constrained by no-carry restrictions. We find no-carry laws restrict partisan fiscal outcomes but tend to lead to more partisan regulatory outcomes.

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File URL: http://mpra.ub.uni-muenchen.de/37430/1/MPRA_paper_37430.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 37430.

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Date of creation: Feb 2012
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Handle: RePEc:pra:mprapa:37430
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  1. Reed, W. Robert, 2006. "Democrats, republicans, and taxes: Evidence that political parties matter," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 725-750, May.
  2. Coughlin, Peter & Nitzan, Shmuel, 1981. "Electoral outcomes with probabilistic voting and Nash social welfare maxima," Journal of Public Economics, Elsevier, vol. 15(1), pages 113-121, February.
  3. Bryan Caplan, 2001. "Has Leviathan Been Bound? A Theory of Imperfectly Constrained Government with Evidence from the States," Southern Economic Journal, Southern Economic Association, vol. 67(4), pages 825-847, April.
  4. repec:cup:cbooks:9780521894753 is not listed on IDEAS
  5. repec:bla:restud:v:77:y:2010:i:4:p:1329-1352 is not listed on IDEAS
  6. Coughlin, Peter & Nitzan, Shmuel, 1981. "Directional and local electoral equilibria with probabilistic voting," Journal of Economic Theory, Elsevier, vol. 24(2), pages 226-239, April.
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