Political Institutions and Policy Outcomes: What are the Stylized Facts?

Source: RePEc

ABSTRACT We investigate the effect of electoral rules and political regimes on fiscal policy outcomes in a panel of 61 democracies from 1960 and onwards. In presidential regimes, the size of government is smaller and less responsive to income shocks, compared to parliamentary regimes. Under majoritarian elections, social transfers are smaller and aggregate spending less responsive to to income shocks than under proportional elections. Institutions also shape electoral cycles; only in presidential regimes is fiscal adjustment delayed until after the elections, and only in proportional and parliamentary systems do social transfers expand around elections. Several of these empirical regularities are in line with recent theoretical work; others are still awaiting a theoretical explanation.

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    ABSTRACT: This article provides an empirical assessment of the relation between the cyclicality of fiscal expenditure policy, output volatility and economic growth, using a cross-section of 88 countries over the period 1960 to 2004. Identification of the effects of (endogenous) cyclical expenditure policy is achieved by exploiting the exogeneity of countries’ political and institutional characteristics, which we find to be relevant determinants of the cyclicality of expenditures. There are three main results: first, both pro- and countercyclical expenditure policy amplify output volatility, much in a way like pure fiscal shocks; second, output volatility, due to variations in cyclical and discretionary fiscal policy, is negatively associated with economic growth; third, there is no direct effect of cyclicality on economic growth other than through output volatility.
    Applied Economics 03/2012; 44(7):835-851. · 0.46 Impact Factor
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    ABSTRACT: Purpose – Public bodies are being encouraged to procure sustainably, to reduce their social and environmental footprint and in order to stimulate sustainability in the private sector. However, little is known about how public sector organisations internationally are responding to this encouragement or of the conditions that are most conducive to sustainable procurement (SP). The purpose of this paper is to address these gaps in our knowledge so as to inform policy development at the government and organisational levels. Design/methodology/approach – The authors report the findings of a survey of SP practices within a sample of over 280 public procurement practitioners from 20 countries and with collective responsibility for expenditure totalling $45bn p.a. Findings – The authors' analysis shows that some SP practices are evident in public sector procurement practice and that the extent and nature of SP practices varies significantly across regions. In addition, the authors highlight the main facilitators of, and barriers to, engagement with SP and investigate their importance for engagement with particular dimensions of SP. Research limitations/implications – Survey respondents are volunteers and may to some degree be more interested in, or engaged with, SP than other public sector organisations. The analysis is cross-sectional and therefore provides only a snapshot of SP practice in the public sector organisations studied. Practical implications – The paper identifies how policy and practice in SP vary across regions, providing practical insights into whether and how government policies are being implemented around the world. Originality/value – The paper provides the first systematic and comprehensive insight into how public bodies are implementing SP internationally and of the major situational factors that are shaping engagement with SP. The authors evaluate the current effectiveness of policy initiatives regarding SP and highlight the organisational catalysts and inhibitors of greater involvement in SP.
    International Journal of Operations & Production Management 01/2011; 31(4):452-476. · 1.13 Impact Factor
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    ABSTRACT: Although fiscal policies of central governments sometimes provide modest insurance against regional income shocks, this paper shows that procyclical fiscal policy among provincial governments can easily overwhelm these stabilizing effects. We examine the cyclicality of budget items among provincial governments in seven federations, showing that own-source taxes are generally highly procyclical, and contrary to common wisdom, revenue sharing and discretionary transfers are either acyclical or procyclical. Constituent governments are thus left alone to smooth their own shocks, and we document the extent to which various restraints on borrowing and saving undermine their ability to do so. The resulting procyclicality of provincial fiscal policy is likely to have important implications in a world where demands for countercyclical fiscal policy are increasing but considerable fiscal responsibilities are being devolved to subnational governments. Copyright 2009 Blackwell Publishing Ltd.
    Economics and Politics 01/2010; 22(1):37-67. · 0.63 Impact Factor

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