The Causes of Fiscal Stalemate

44 Pages Posted: 18 Aug 2010  

Carl Klarner

Indiana State University Political Science

Matt Muckler

affiliation not provided to SSRN

Justin Phillips

Columbia University - Department of Political Science

Date Written: August 17, 2010

Abstract

Why do lawmakers in some states routinely pass late budgets, while their counterparts elsewhere rarely do? We argue that a late budget imposes a number of political and private costs on lawmakers, the magnitudes of which are shaped principally by institutions and features of the political environment. When the private and public costs of delay are high we expect the budget to be adopted on time, but when these costs are low the probability and length of delay should increase. We test our expectations using an original dataset of the timing of budget adoption for all states over a forty-six year period. As expected, we find that variables which shape the costs of delay - legislative session length, the reversion point in the absence of an on-time budget, and divided government - are key determinants of the probability of stalemate. The length of the stalemate, however, is best predicted by the complexity of the budget. Insights from our analysis can be applied to budgeting at the national level. In particular, they help explain variation in the frequency and length of late federal appropriations bills and suggest reasons why federal budgets experience more stalemate than those adopted by states.

Keywords: Stalemate, Budget, Late, State, Gridlock, Divided Government, Budgeting, State Government, Institutions, Late Budgets

JEL Classification: P16, H61, H72, H70

Suggested Citation

Klarner, Carl and Muckler, Matt and Phillips, Justin, The Causes of Fiscal Stalemate (August 17, 2010). Available at SSRN: https://ssrn.com/abstract=1660494 or http://dx.doi.org/10.2139/ssrn.1660494

Carl Klarner

Indiana State University Political Science ( email )

United States

Matt Muckler

affiliation not provided to SSRN ( email )

Justin Phillips (Contact Author)

Columbia University - Department of Political Science ( email )

7th Floor, International Affairs Bldg.
420 W. 118th Street
New York, NY 10027
United States

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