Strong politicians, small deficits: evidence from Norwegian local governments

Borge, Lars–Erik

doi:10.1016/j.ejpoleco.2004.06.005

Cited by 86 publications

(57 citation statements)

References 34 publications

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“…As Ashworth and Heyndels (2005) argue, that similar institutional structures avoid omitted country-level variable biases as well as allowing research on larger samples. Borge (2005)-for Norwegian municipalities-or 1 3 Artés and Jurado (2015)-for the Spanish case-find a positive effect of government fragmentation on budget deficits. However, Schaltegger and Feld (2009), who analyze Swiss Cantons, provide more nuanced results and find only that the size of the cabinet affects positively the size of expenditure, regardless of being formed by coalitions or not.…”

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confidence: 95%

Government fragmentation and fiscal deficits: a regression discontinuity approach

Artés

Jurado

2018

Public Choice

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Some electoral systems favor strong single-party majority governments, while others the formation of coalitions. Having one or the other is likely to affect economic outcomes in ways that are unintended when the electoral rules are approved. In this paper, we show that government fragmentation has large fiscal implications. We also provide results that have a causal interpretation. Using a panel of Spanish municipalities, along with a close-elections regression discontinuity design, we find that single-party majorities run budgets with a 1.5% point larger primary surplus than that of coalitions. In addition, we show that lower deficits are driven mainly by single-party majority governments' capacity to raise more revenues. These findings are robust to several model specifications.

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confidence: 95%

Government fragmentation and fiscal deficits: a regression discontinuity approach

Artés

Jurado

2018

Public Choice

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“…Therefore, by not having to increase public expenditures, local authorities will also not need more debt. The strength/fragmentation 5 of power will mean a greater need of resources and therefore more debt (Ashworth et al, 2005;Borge, 2005;Geys, 2007;Hagen & Vabo, 2005;Hájek & Hájková, 2009;Letelier, 2011;Sánchez Mier, 2011;Tovmo, 2007;Vila i Vila, 2010;Zafra Gómez et al, 2011 Bastida et al (2013) explain that greater strength will lead to less debt. In turn, Vallés Giménez (2002) and López consider the same factor, designating it as the political market and purchase of votes to achieve governability through coalitions.…”

Section: Theory Of Public Choicementioning

confidence: 99%

Political-Ideological Circumstances and Local Authorities’ Debt: Evidence from Portuguese Municipalities

Ribeiro¹,

Jorge²

2015

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“…-3 -With respect to empirical papers, Hallerberg and von Hagen (1999), von Hagen (2002), Borge (2005, Hallerberg et al (2007) and Hallerberg and Wolff (2008) also refer to the importance of a "strong minister of finance". In most of these articles, the strength of the finance minister is derived from the budget process: A finance minister seems to be strong if the delegation approach (i.e.…”

Section: Strength Of the Finance Minister And Personal Characteristicsmentioning

confidence: 99%

Do Personal Characteristics of Finance Ministers Affect the Development of Public Debt?

Moessinger

2012

SSRN Journal

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Non-technical SummaryThe role of the finance minister differs in various aspects from that of the remaining cabinet members. His main task is to enforce overall budgetary objectives. Depending on the organization of the budget process, the finance minister's functions range from monitoring and enforcing negotiated budgetary objectives to setting the fiscal agenda for the upcoming years. Apart from his original budget task, the finance minister is not primarily responsible for specific spending projects. This dissolves his incentives to exploit pork barrel projects. Quite the contrary, the finance minister's institutional function in the cabinet is to resist the emerging spending pressures of his colleagues. The finance minister is thus the cabinet member who has the strongest interest in sound public finance and has a comprehensive view of the budget. However, while there is a growing literature on the impact of personal characteristics of decision makers on policy decisions in various fields in economics, investigations concerning fiscal policy are still scarce and mostly refer to the personal characteristics of the prime minister. This paper's innovations are thus threefold: To the best of my knowledge, it is the first description of personal characteristics of national finance ministers in Europe for the period 1980 -2010. Second, it extends the literature on the determinants of public debt by the, so far, largely neglected impact factors of one of the most relevant decision makers, and third, it is the first investigation which combines personal characteristics of finance ministers with those of their prime ministers.To answer the question whether personal characteristics of finance ministers affect the development of public debt, I use a unique dataset of personal characteristics of European national finance ministers and their respective prime ministers for the period 1980 -2010. In a nutshell, the results reveal that especially a finance minister's experience gained in office and his political experience have an impact on the development of public debt: The change of the debt to GDP ratio is negative the more experience a finance minister has gained as a minister of finance or in former positions as a national cabinet member. While the former result suffers from potential endogeneity, several arguments support that the latter result can be interpreted in a causal way. In contrast, a finance minister's educational background or ideology have no significant...

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Strong politicians, small deficits: evidence from Norwegian local governments

Cited by 86 publications

References 34 publications

Government fragmentation and fiscal deficits: a regression discontinuity approach

Government fragmentation and fiscal deficits: a regression discontinuity approach

Political-Ideological Circumstances and Local Authorities’ Debt: Evidence from Portuguese Municipalities

Do Personal Characteristics of Finance Ministers Affect the Development of Public Debt?

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