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Fiscal Governance and Electoral Accountability: Evidence from Late Budgets

33 Pages Posted: 19 Jul 2010 Last revised: 30 Aug 2010

David Dreyer Lassen

University of Copenhagen - Department of Economics

Asger Lau Andersen

University of Copenhagen - Department of Economics

Date Written: 2010

Abstract

Are politicians held accountable for bad governance? Using a unique panel data set on late budgets in US state governments, we investigate whether voters react to bad fiscal governance by penalizing political actors involved in the budgetary process at election day. We find that legislatures face significant negative electoral consequences of not finishing a budget on time, while governors are penalized only under unified governments. In general, electoral penalties are larger where clarity of responsibility, affected by divided government, supermajority requirements and seat share margins, is higher, consistent with models of retrospective voting.

Keywords: retrospective voting, electoral accountability, budgeting, fiscal stalemate, fiscal governance, good governance

JEL Classification: D72, H11, H72, H83

Suggested Citation

Lassen, David Dreyer and Andersen, Asger Lau, Fiscal Governance and Electoral Accountability: Evidence from Late Budgets (2010). APSA 2010 Annual Meeting Paper. Available at SSRN: https://ssrn.com/abstract=1643449

David Dreyer Lassen (Contact Author)

University of Copenhagen - Department of Economics ( email )

Studiestraede 6
DK 1455 Copenhagen
Denmark
+45 3532 4412 (Phone)
+45 3532 4444 (Fax)

Asger Lau Andersen

University of Copenhagen - Department of Economics ( email )

Ă˜ster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark

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