Budget Deficits and Coalition Governments

This paper shows that compromise between different ideologicalmotivations within multiparty governments may result in a biastoward running budget deficits even if all parties in thecoalition prefer balanced budgets. The deficit bias increases withthe degree of ``polarization'' of the ideological motivations andgenerally decreases with the degree of concentration of powerwithin the government. Although the analysis is conducted assuminga proportional representation electoral system, the results willalso apply to majoritarian systems if the winning party comprisesideologically different constituencies. The relationship betweenbudget deficits and multiparty governments is investigated usingdata from a sample of eight European Union countries for the period1971–1990. Analysis on pooled data is partly in line with the theory.Time series within country analysis is less favorable: we findclear support to the theory only in the case of Italy.     

The Status of the Budget Constraint,Federalism and the Relative Size of Government: A Bureaucracy Approach

We develop a model along the lines of Niskanen,articulating that under a soft government budgetconstraint the full production cost of the public goodis not reflected in the tax price as perceived by theconsumer-taxpayer-voter. Various proportions ofnon-tax financing and different degrees of votermyopia with respect to discounting the future taxliabilities are taken into account. It can be shownthat both the actual level of public output and theamount of slack resources are lower under a hardbudget constraint than under a soft budget regime.Lower levels of government typically operate under ahard budget constraint when compared with the federallevel since they have only limited (public) borrowingopportunities and no access to money creation(seignorage). In a federalist setting more governmentdecisions are taken under a hard budget constraintthan in a unitary state. Hence one would expect thatthe overall size of government is relatively smallerin a structure with fiscal federalism. An empiricaltest for 19 OECD-countries (1990–1992) seems tosupport this hypothesis.     

Budget Deficits, Hyperinflation, and Stabilization in Ukraine, 1991–96

Since gaining independence in 1991, the former Soviet republic of Ukraine has been plagued by persistent fiscal deficits and punctuated periods of rampant inflation. Having few options to cover the fiscal deficit, Ukraine in 1992–94 largely resorted to money creation. The result was that hyperinflation broke out in late 1993, its burden falling mainly on households, but also eroding the capital of state enterprises. Falling revenues and robust expenditures—even in the face of the continuing output collapse—were exacerbated by a policy of lavishing large amounts of cheap credits on state enterprises. This article reviews and analyzes the causes of Ukraine's inflationary impulse, the descent into hyperinflation in 1993–94, its effects, and the subsequent drive to stabilization by 1996. It concludes that a substantial erosion of the inflation tax base by late 1995 propelled the government to pursue stabilization through an IMF-sponsored program of fiscal restraint. A two-year drive to fiscal and monetary stabilization ensued. Stabilization was largely achieved by mid-1996, permitting a currency reform in September.     

民俗的力量与政府权力

谁都承认民俗对所有人的言行和思想具有控制力量，是一种规范和规范的依据。民俗规范力量的呈现的确有时代的差异。在现代社会，一些民俗借助政府权力，力量得到更为充分的释放，而政府权力则利用民俗力量得到更广泛的展示。     

Voting Weights and Formateur Advantages in the Formation of Coalition Governments

Over the last two decades a large and important literature has emerged that uses game theoretic models of bargaining to study legislative coalitions. To test key predictions of these models, we examine the composition of coalition governments from 1946 and 2001. These predictions are almost always expressed in terms of parties' minimal-integer voting weights. We calculate such weights for all parliamentary parties. In addition, we develop a statistical model that nests the predictions of many of these models of the distribution of posts. We find that for parties that join (but did not form) the government, there is a linear relationship between their share of the voting weight in parliament and their share of cabinet posts. The party that forms the government (the formateur) receives a substantial "bonus" relative to its voting weight. The latter finding is more consistent with proposal-based bargaining models of coalition formation and suggests that parties gain disproportionate power not because of their size but because of their proposal power.     

Coalition Governments Versus Minority Governments: Bargaining Power, Cohesion and Budgeting Outcomes

Recent empirical work investigating the role of minoritygovernments in the selection of fiscal policies has shown thatthe majority status does not affect the budget size. Thispaper presents an analytical framework which accounts for thisresult. It combines a government formation game and a budgetgame involving cabinet and parliament. A general indifferenceresult applies. An exogenous shock to the bargaininigenvironment which absorbes the cohesion of the governmentincreases the demand for expenditures. At the same time theconditions for the formation of a minority government arefulfilled. If the formateur is strong, a minority governmentcan be a device for cutting expenditures.     

The State of the Tobacco Settlement: Are Settlement Funds Being Used to Finance State Government Budget Deficits? A Research Note

In the Master Settlement Agreement, the major U.S. tobacco companies agreed to pay approximately $229 billion between 1999 and 2025 to 46 states, the District ofColumbia, and five U.S. territories. The windfall raises important spending andfinancing decisions for state governments. This research note analyzes how governments are spending their settlement proceeds, especially whether states are using funds to finance current budget deficits, and investigates the financing practice by several states of selling their right to future settlement proceeds to support the issuance and repayment of tobacco securitization bonds.     

Flexible Integration,EMU and Relative Voting Power in the EU

This paper studies the implications offlexible integration in the European Union. Itanalyses the voting power of member states in theCouncil of Ministers when differently sized subgroupsof the EU are set up. European Monetary Union isreferred to as the most important example of flexibleintegration. The Banzhaf-Index is calculated to studythe distribution of voting power in the decisionmaking process according to the stability and growthpact. The results show considerable fluctuations,especially for smaller countries, in relative votingpower, the latter being defined as the relationbetween voting power and relative voting weight.     

Deficits, Soft Budget Constraints and Bailouts: Budgeting after the Norwegian Hospital Reform

In the 1990s, the Norwegian hospital sector was characterized by soft budgetary constraints and increasing budget deficits. This was one of the main antecedents of the 2002 hospital reform, where the central state took over ownership of the hospitals from the counties. Arguably, the centralization of ownership, financing and production would harden the budget constraints and increase the budgetary discipline. This analysis shows that this has not been accomplished. Instead, the production has been far above what was planned, and the deficits higher than ever. Two stages of the post-reform budget processes are analyzed: first, the stage where the central state set the budgets and sends signals of budgetary rules (whether the state sends signals of soft or hard budget constraints), and second, how the central state handled deficits in the hospital sector as they emerged (whether the hospitals was bailed out or not). The conclusion is that the central state neither set a hard budget constraint nor managed to stay firm as deficits turned up. It is argued that three mechanisms explain the prevailing problems of managing the hospital sector: uncertainty of the hospitals' financial situation during the transition phase; minority governments; and specific features related to the organization of the budgetary process in parliament.     

Fiscal Policy,Deficits and Politics of Subnational Governments: The Case of the German Laender

The first part of the paper briefly describesinstitutional aspects of the German federal system andexamines the economic and fiscal performance of theGerman Laender since 1970. Taking into account theinstitutional settings, especially the fact that theGerman Laender cannot set tax rates individually, wedevelop a highly stylized model of subnationalgovernments that do not have access to the tax rateinstrument and thus have to use expenditures as apolicy variable. The model implies an expendituresmoothing policy of subnational governments andcomplements the famous tax smoothing model. Theempirical section examines whether governments ofvarious ideology show significant differences infiscal stabilization policy. Our results indicatethat regional differences in public debt accumulationand public expenditure policy in general is largelydetermined by interregional differences in economicperformance, whereas we do not find any significantimpact on the ideological composition of the Laendergovernments.     

Expressions of Distrust: Third-Party Voting and Cynicism in Government

Voter distrust of the national government is an ongoing theoretical concern for scholars who study voting behavior in the United States. Previous research demonstrates that distrustful voters are less likely to vote for major party candidates than their more trusting counterparts. Using the American National Election Survey, we explore the relationship between citizen distrust and voting for three major third-party challengers (Wallace, Anderson, and Perot) and the use of trust levels as predictors of third- party voting. We find citizen trust levels are significant and strong predictors of third-party voting, independent of other common explanatory variables of vote choice. We also find trust levels are stable over time, and we find little evidence to support the argument that trust levels measure trust of incumbent political figures.     

Identification,Agreement and Government Performance: The Relative Impact on Voting*

Debating explanations of electoral behavior, American scholars have focused on three main theories: The identification model relying on underlying loyalty of voters towards specific parties; the political agreement or proximity model assuming a rational calculation of parties' ideological positions or stand on salient political issues as the yardstick for choice of party; and the investment model relying on voters' ability to calculate which government alternative will bring most utility for the individual voter. Examining these theories with the use of Norwegian data from the elections of 1965, 1969 and 1977, we find that the identification model is far the most powerful in predicting individual voting behavior. This model also has an edge in explaining support for the individual parties and the total distribution of voters. However, at the major postwar government election in 1965, the investment model certainly is of importance, and at the election in 1977 the significance of the proximity model has increased.     

Party Strength,the Personal Vote,and Government Spending

“Strong” political parties within legislatures are one possible solution to the problem of inefficient universalism, a norm under which all legislators seek large projects for their districts that are paid for out of a common pool. We demonstrate that even if parties have no role in the legislature, their role in elections can be sufficient to reduce spending. If parties in the electorate are strong, then legislators will demand less distributive spending because of a decreased incentive to secure a “personal vote” via local projects. We estimate that spending in states with strong party organizations is at least 4% smaller than in states where parties are weak. We also find evidence that strong party states receive less federal aid than states with weak organizations, and we theorize that this is because members of Congress from strong party states feel less compelled to secure aid than members from weak party states.     

Election Inversions,Coalitions and Proportional Representation: Examples of Voting Paradoxes in Danish Government Formations

When collective choices are made in more than one round and with different groups of decision makers, so‐called ‘election inversions’ may take place, where each round produces different majority outcomes. In this article, two versions of such compound majority paradoxes are identified that are particularly, but not exclusively, relevant for systems of proportional representation with governing coalitions: the ‘Threshold Paradox’ and the ‘Federal Paradox’. The empirical relevance of the paradoxes is illustrated with examples from two Danish elections (in 1971 and in 1990), where a majority of the voters voted for one bloc of parties, but a majority of the seats fell to another.     

Budget Transparency, Fiscal Performance, and Political Turnout: An International Approach

This paper attempts, for the first time, to assess the relationships between budget transparency, fiscal situation, and political turnout using a comparative international approach. With this aim, the authors build a comprehensive index of budget transparency encompassing 40 budget features based on international standards for a sample of 41 countries. They find a positive relationship between national government fiscal balance and budget transparency: The more information the budget discloses, the less the politicians can use fiscal deficits to achieve opportunistic goals. The univariate analysis shows a positive relationship between political turnout and transparency. This result gives some evidence of a positive answer to the question raised by James Alt and David Dreyer Lassen: Does transparency affect political outcomes such as turnout? To some extent, that the more transparent the budget reports are, the more incentives people have to vote. With respect to three variables—transparency, government fiscal balance, and electoral turnout—three clusters of countries arise: low transparency–fiscal imbalance, low transparency–small fiscal imbalance and high transparency–fiscal surplus.     

Developing and Testing an Integrative Framework for Open Government Adoption in Local Governments

Open government is an important innovation to foster trustworthy and inclusive governments. The authors develop and test an integrative theoretical framework drawing from theories on policy diffusion and innovation adoption. Based on this, they investigate how structural, cultural, and environmental variables explain three dimensions of open government: accessibility, transparency, and participation. The framework is tested by combining 2014 survey data and observational data from 500 local U.S. government websites. Organizational structure, including technological and organizational capacity, is a determinant shared by all dimensions of open government. Furthermore, accessibility is affected by a mixture of an innovative and participative culture and external pressures. A flexible and innovative culture positively relates to higher levels of transparency, whereas capacity is a strong predictor of adopting participatory features. The main conclusion is that there is no one‐size‐fits‐all solution to fostering the three dimensions of open government, as each dimension is subject to a unique combination of determinants.     

Deficits in Local Government Budgets in Israel: A Reflection of Political Cycles and an Expression of Local Autonomy

This article addresses local government budgeting in the context of two Israeli political cycles: the parliamentary election period and the municipal election period. Deficits are not unusual in any of the three types of Israeli localities: municipalities, local councils, and regional councils. And these deficits exhibit a definite pattern; they are largest in election periods. Specific examples are cited to show this hypothesis holds true for all types of localities (including Israel's three largest cities), and for both Jewish and Arab localities as well.