Checks and Balances on Political Budget Cycles: Cross-Country Evidence

22 Pages Posted: 9 Jul 2009

See all articles by Jorge M. Streb

Jorge M. Streb

Universidad del CEMA

Daniel Lema

Universidad del CEMA

Gustavo Torrens

Indiana university

Abstract

Previous empirical work on political budget cycles (PBCs) implicitly assumes the executive has full discretion over fiscal policy. Instead, we ask what happens when legislative checks and balances limit executive discretion. We find that legislative checks and balances moderate PBCs in countries with high compliance with the law. More effective checks and balances help to explain why cycles are weaker in developed countries and in established democracies. When the discretional component of executive power is isolated, there are significant cycles in all democracies.

Suggested Citation

Streb, Jorge Miguel and Lema, Daniel and Torrens, Gustavo, Checks and Balances on Political Budget Cycles: Cross-Country Evidence. Kyklos, Vol. 62, Issue 3, pp. 426-447, August 2009, Available at SSRN: https://ssrn.com/abstract=1432263 or http://dx.doi.org/10.1111/j.1467-6435.2009.00444.x

Jorge Miguel Streb (Contact Author)

Universidad del CEMA ( email )

Av. Cordoba 374
Buenos Aires, CABA
Argentina

HOME PAGE: http://www.ucema.edu.ar/u/jms/

Daniel Lema

Universidad del CEMA ( email )

1054 Buenos Aires
Argentina

Gustavo Torrens

Indiana university ( email )

Wylie Hall, 100 S Woodland Ave
Bloomington, IN 47405-7104
United States
8128568131 (Phone)
47405-7104 (Fax)

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