Legislative Institutions and Fiscal Policy

Abstract

A number of studies, using different samples and datasets, claim that various legislative institutions affect fiscal policy. This paper uses data from a 2003 survey of budgeting practices to comprehensively evaluate the effect of a range of legislative institutions on public spending in 25 OECD countries. It finds no evidence for most institutional hypotheses. Only the power of the legislature to amend the budget proposal of the executive has a significant impact on public expenditures.