Executive veto and spending limitation: Positive political economy with implications for institutional choice

The consequences of institutional change in the budgetary process are not generally determinate independent of the preferences of political actors. Nonetheless, this study shows for a general class of preference configurations that the legislative branch cannot be made better off by a spending limitation unless the executive is empowered with a line-item veto. In the absence of executive item-veto authority there is no incentive for the legislature to constrain spending.