Fiscal Performance of Minority Governments: New Empirical Evidence for OECD Countries

34 Pages Posted: 25 Jul 2019

See all articles by Niklas Potrafke

Niklas Potrafke

CESifo (Center for Economic Studies and Ifo Institute)

Date Written: 2019

Abstract

I use new data on central and general governments for 23 OECD countries over the period 1960-2015 (unbalanced panel) to examine fiscal performance under minority governments. The results do not suggest that minority governments had higher fiscal deficits and public expenditure than majority governments -- corroborating many previous studies. An innovation of my study is to examine fiscal policies of minority governments that enjoy organized support of opposition parties. The results do not show that minority governments that enjoy organized support of opposition parties increased public expenditure to a larger extent than majority governments. If anything, fiscal deficits were somewhat higher under single-party minority governments with organized support of opposition parties than under majority governments especially. Minority and majority governments had quite similar fiscal performance in OECD countries.

Keywords: minority governments, organized support of opposition parties, budget deficits, public expenditure, general and central government, OECD countries, panel data models

JEL Classification: D720, H000, C230, P160

Suggested Citation

Potrafke, Niklas, Fiscal Performance of Minority Governments: New Empirical Evidence for OECD Countries (2019). CESifo Working Paper No. 7733, Available at SSRN: https://ssrn.com/abstract=3422628

Niklas Potrafke (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

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