TY  - JOUR
AU  - Hallerberg,Mark
AU  - Hagen,Jurgen von
TI  - Electoral Institutions, Cabinet Negotiations, and Budget Deficits in the European Union
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6341
PY  - 1997
Y2  - December 1997
UR  - http://www.nber.org/papers/w6341
L1  - http://www.nber.org/papers/w6341.pdf
N1  - Author contact info:
Mark Hallerberg

Jürgen von Hagen
Zentrum fur Europaische
Integrationsforschung
Universitat Bonn, Walter-Flex-Str. 3
GERMANY
E-Mail: vonhagen@uni-bonn.de
M1  - published as Mark Hallerberg, Jürgen von Hagen. "Electoral Institutions, Cabinet Negotiations, and Budget Deficits in the European Union," in James M. Poterba and Jürgen von Hagen, editors, "Fiscal Institutions and Fiscal Performance" University of Chicago Press (1999)

AB  - A rough consensus has emerged that states with proportional representation systems are" likely to run larger deficits than plurality states.  We argue that electoral institutions matter because" they restrict the type of budgetary institution at the governmental phase which a state has at its" disposal.  Cabinet members may willingly delegate authority to a finance minister who can monitor" spending ministers and punish those who  defect' in a process we label  delegation procedure is feasible in states where one-party governments are the norm.  Such states usually have" plurality electoral systems.  In multi-party governments, which are common in states with" proportional representation, the coalition members are not willing to delegate to one actor the ability" to monitor and punish the others.  Negotiated targets in the form of fiscal contracts provide an" alternative in multi-party governments.  Pooled time series regression results for the current" European Union states in the period 1981-94 support our contention that it is the presence or absence" of one of these budgetary institutions, rather than the plurality/proportional representation" dichotomy, which has the greatest impact on debt levels.
ER  -