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Political fragmentation and government spending: Bringing ideological polarization into the picture
Abstract
The empirical literature has come to no agreement about the effect of legislative fragmentation on fiscal outcomes – the so-called weak government hypothesis. With the aim of reconciling the empirical evidence with theory, in this paper we discuss and test a new hypothesis about this relationship: that fragmentation should matter for public spending only to the extent that the degree of polarization is high enough. Our results for presidential democracies show that, provided that there is some degree of polarization, a marginal change in the level of fragmentation in the governing coalition affects positively the size of the budget. Moreover, no effect of fragmentation is found in the absence of polarization. We also find that what matters for fiscal policy in presidential democracies is the degree of fragmentation and polarization within the governing coalition, rather than in the legislature at large. For parliamentary democracies we do not find a clear support for our hypothesis. Our results suggest interesting differences between presidential and parliamentary systems.

Autores:
Eslava, Marcela; Nupia, Oscar
Palabras clave:
Common-pool resource problem, government spending, ideological polarization, political fragmentation
Archivo:
Año:
2010
Mes:
Enero
Número:
3