Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/214301
Authors: 
Schaltegger, Christoph A.
Feld, Lars P.
Year of Publication: 
2004
Series/Report no.: 
CREMA Working Paper No. 2004-15
Abstract: 
The fiscal commons problem is one of the most prominent explanations of excessive spending and indebtedness in political economics. The more fragmented a government, the higher its spending, deficits and debt. In this paper we investigate to what extent this problem can be miti-gated by different fiscal or constitutional institutions. We distinguish between two variants of fragmented governments: cabinet size and coalition size. Theoretically, they both describe the degree to which the costs of spending decisions are internalized by individual decision-makers. In addition, we evaluate whether constitutional rules for executive and legislation as well as budget rules shape the size of government and how the different rules interact with fragmentation in de-termining government size. The empirical study of the role of fragmented governments for fiscal policy outcomes is based on a panel of the 26 Swiss cantons over the 1980-1998 period. The re-sults indicate that the number of ministers in the cabinet is negatively associated with fiscal disci-pline. Furthermore, the fiscal referendum does effectively restrict the fiscal commons problem, but less successfully than the budget rule.
Subjects: 
Fragmentation
Fiscal Policy
Referendums
Legislative Rules
Budget Rules
JEL: 
E61
E63
H61
Document Type: 
Working Paper

Files in This Item:
File
Size
185.32 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.