Hostname: page-component-6bf8c574d5-b4m5d Total loading time: 0 Render date: 2025-02-26T15:27:38.975Z Has data issue: false hasContentIssue false
  • English
  • Français

Divided Government, Fiscal Institutions, and Budget Deficits: Evidence from the States

Published online by Cambridge University Press:  02 September 2013

James E. Alt  and
Robert C. Lowry
James E. Alt
Affiliation:
Harvard University
Robert C. Lowry
Affiliation:
Michigan State University
Get access Rights & Permissions [Opens in a new window]

Abstract

Does partisan control of American state government have systematic effects on state spending and taxing levels? Does divided control affect the government's ability to make hard decisions? Do institutional rules like legal deficit carryover restrictions matter? Using a formal model of fiscal policy to guide empirical analysis of data covering the American states from 1968 to 1987, we conclude that (1) aggregate state budget totals are driven by different factors under Democrats and Republicans, the net result being that Democrats target spending (and taxes) to higher shares of state-level personal income; (2) divided government is less able to react to revenue shocks that lead to budget deficits, particularly where different parties control each chamber of the legislature; and (3) unified party governments with restricted ability to carry deficits into the next fiscal year (outside the South) have sharper reactions to negative revenue shocks than those without restrictions.

Type
Articles
Information
American Political Science Review , Volume 88 , Issue 4 , December 1994 , pp. 811 - 828
Copyright
Copyright © American Political Science Association 1994

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Abrams, Burton, and Dougan, William. 1986. “The Effects of Constitutional Restraints on Governmental Spending.” Public Choice 49:101–16.CrossRefGoogle Scholar
Advisory Commission on Intergovernmental Relations. 1989. Significant Features of Fiscal Federalism. Washington: Advisory Commission on Intergovernmental Relations.Google Scholar
Alesina, Alberto, and Drazen, Allan. 1991. “Why Are Stabilizations Delayed?” American Economic Review 81:1170–88.Google Scholar
Alesina, Alberto, and Rosenthal, Howard. 1994. Partisan Politics, Divided Government, and the Economy. New York: Cambridge University Press.Google Scholar
Alesina, Alberto, and Sachs, Jeffrey. 1990. “Political Parties and the Business Cycle in the United States, 1948–84.” Journal of Money, Credit, and Banking 20:63–82.CrossRefGoogle Scholar
Alt, James E. 1991. “Leaning into the Wind or Ducking out of the Storm? U.S. Monetary Policy in the 1980s.” In Politics and Economics in the 1980s, ed. Alesina, Alberto and Carliner, Geoffrey. Chicago: National Bureau of Economic Research and University of Chicago Press.Google Scholar
Alt, James E., and Alec Chrystal, K.. 1983. Political Economics. Berkeley: University of California Press.Google Scholar
Alt, James E., and Lowry, Robert. 1993. “Split Branch Government.” Presented to the National Bureau of Economic Research Summer Institute in Public Finance, Cambridge, MA.Google Scholar
Alt, James E., and Stewart, Charles. N.d. “Parties and the Deficit: Some Historical Evidence.” National Bureau of Economic Research. Mimeo.Google Scholar
Barro, Robert. 1979. “On the Determination of the Public Debt.” Journal of Political Economy 87:940–71.CrossRefGoogle Scholar
Barro, Robert. 1986. “U.S. Deficits since World War I.” Scandinavian Journal of Economics 88:195–222.CrossRefGoogle Scholar
Behn, Robert, ed. 1991. Governors on Governing. Lanham, MD: University Press of America.Google Scholar
Beyle, Thad. 1983. “Governors.” In Politics in the American States, ed. Gray, Virginia, Jacob, Herbert, and Vines, Kenneth N.. Boston: Little, Brown.Google Scholar
Beyle, Thad, ed. 1992. Governors and Hard Times. Washington: CQ Press.Google Scholar
Bretschneider, Stuart, and Gorr, Wilpen. 1992. “Economic, Organizational, and Political Influences on Biases in Forecasting State Sales Tax Receipts.” International Journal of Forecasting 7:457–66.CrossRefGoogle Scholar
Bunche, Beverly. 1991. “The Effect of Constitutional Debt Limits on State Governments' Use of Public Authorities.” Public Choice 68:76–95.Google Scholar
Carter, John, and Schap, David. 1990. “Line Item Veto: Where Is Thy Sting?” Journal of Economic Perspectives 4:103–18.CrossRefGoogle Scholar
Chappell, Henry, and Keech, William. 1986. “Party Differences in Macroeconomic Policies and Outcomes.” American Economic Review 76(2):71–74.Google Scholar
Chubb, John. 1985. “The Political Economy of Federalism.” American Political Science Review 79:994–1015.CrossRefGoogle Scholar
Chubb, John. 1988. “Institutions, the Economy, and the Dynamics of State Elections.” American Political Science Review 82:133–54.CrossRefGoogle Scholar
Clynch, Edward, and Lauth, Thomas. 1991. Governors, Legislators, and Budgets: Diversity across the American States. New York: Greenwood.Google Scholar
Cohen, Linda, and Noll, Roger. 1984. The Electoral Connection to Intertemporal Policy Evaluation by a Legislator. CEPR Publication No. 36. Stanford: Stanford University.Google Scholar
Council of State Governments. 1990. The Book of the States. Lexington, KY: Council of State Governments.Google Scholar
Cox, Gary, and McCubbins, Matthew. 1992. “Divided Control of Fiscal Policy.” In The Politics of Divided Government, ed. Cox, Gary and Kernall, Samuel. Boulder: Westview.Google Scholar
Cutler, Lloyd. 1989. “Now Is the Time for All Good Men.” William and Mary Law Review 30:387–402.Google Scholar
Dearden, James, and Husted, Thomas. 1990. “Executive Budget Proposal, Executive Veto, Legislative Override, and Uncertainty: A Comparative Analysis of the Budgetary Process.” Public Choice 65:1–19.CrossRefGoogle Scholar
Erikson, Robert S., Wright, Gerald C. Jr.,, and McIver, John. 1989. “Political Parties, Public Opinion, and State Policy in the United States.” American Political Science Review 83:729–50.CrossRefGoogle Scholar
Ferejohn, John, and Shipan, Charles. 1990. “Congressional Influence on the Bureaucracy.” Journal of Law, Economics, and Organizations 6:1–20.CrossRefGoogle Scholar
Fiorina, Morris P. 1992. Divided Goverment. New York: Macmillan.Google Scholar
Garand, James. 1988. “Explaining Government Growth in the U.S. States.” American Political Science Review 82:837–49.CrossRefGoogle Scholar
Gramlich, Edward. 1991. “The 1991 State and Local Fiscal Crisis.” Brookings Papers on Economic Activity 1991:249–85.CrossRefGoogle Scholar
Hibbs, Douglas. 1987. The American Political Economy. Cambridge: Harvard University Press.CrossRefGoogle Scholar
Husted, Thomas, Morton, Rebecca, and Waller, Christopher. 1992. “Sub-national Fiscal Stabilization and Partisan Politics.” Presented at the annual meeting of the American Political Science Association, Chicago.Google Scholar
Hutchison, Tony, and James, Kathy. 1988. “Legislative Budget Procedures in the Fifty States.” Denver; National Conference of State Legislatures Fiscal Affairs Program.Google Scholar
Inman, Robert P., and Fitts, Michael A.. 1990. “Political Institutions and Fiscal Policy: Evidence from the U.S. Historical Record.” Journal of Law, Economics, and Organization 6:79–132.CrossRefGoogle Scholar
Kiewiet, D. Roderick, and McCubbins, Matthew. 1991. The Logic of Delegation: Congressional Parties and the Appropriations Process. Chicago: University of Chicago Press.Google Scholar
McCubbins, Matthew. 1991. “Party Governance and U.S. Budget Deficits: Divided Government and Fiscal Stalemate.” In Politics and Economics in the 1980s, ed. Alesina, Alberto and Carliner, Geoffrey. Chicago: National Bureau of Economic Research and University of Chicago Press.Google Scholar
Peltzman, Sam. 1987. “Economic Conditions and Gubernatorial Elections.” American Economic Review (Papers and Proceedings) 77:293–97.Google Scholar
Poterba, James. 1994. “State Responses to Fiscal Crisis: The Effects of Budgetary Institutions and Politics.” Journal of Political Economy 102:799–821.CrossRefGoogle Scholar
Roubini, Nouriel, and Sachs, Jeffrey. 1989. “Political and Economic Determinants of Budget Deficits in the Industrial Countries.” European Economic Review 33:903–33.CrossRefGoogle Scholar
Su, Tsai-tsu, Kamlet, Mark, and Mowery, David. 1993. “Modeling U.S. Budgetary and Fiscal Policy Outcomes: A Disaggregated, Systemwide Perspective.” American Journal of Political Science 37:213–15.CrossRefGoogle Scholar
Sundquist, James L. 1988. “Needed: A Political Theory of the New Era of Coalition Government in the United States.” Political Science Quarterly 103:613–35.CrossRefGoogle Scholar
Tabellini, Guido, and Alesina, Alberto. 1990. “Voting on the Budget Deficit.” American Economic Review 80:37–49.Google Scholar
Submit a response

Comments

No Comments have been published for this article.