The Economic Effects Of Constitutions

by Persson, Torsten; Tabellini, Guido

• ISBN13: 9780262661928
• ISBN10: 0262661926
• Format: Paperback
• Copyright: 2005-01-14
• Publisher: The MIT Press

Summary

The authors of The Economic Effects of Constitutionsuse econometric tools to study what they call the "missing link" between constitutional systems and economic policy; the book is an uncompromisingly empirical sequel to their previous theoretical analysis of economic policy. Taking recent theoretical work as a point of departure, they ask which theoretical findings are supported and which are contradicted by the facts. The results are based on comparisons of political institutions across countries or time, in a large sample of contemporary democracies. They find that presidential/parliamentary and majoritarian/proportional dichotomies influence several economic variables: presidential regimes induce smaller public sectors, and proportional elections lead to greater and less targeted government spending and larger budget deficits. Moreover, the details of the electoral system (such as district magnitude and ballot structure) influence corruption and structural policies toward economic growth. Persson and Tabellini's goal is to draw conclusions about the causal effects of constitutions on policy outcomes. But since constitutions are not randomly assigned to countries, how the constitutional system was selected in the first place must be taken into account. This raises challenging methodological problems, which are addressed in the book. The study is therefore important not only in its findings but also in establishing a methodology for empirical analysis in the field of comparative politics.

Author Biography

Torsten Persson is Director of the Institute for International Economic Studies at Stockholm University and Centennial Professor at the London School of Economics.

Guido Tabellini is Professor of Economics at Bocconi University in Milan and President of the Innocenzo Gasparini Institute of Economic Research, also at Bocconi University.

Table of Contents

Series Foreword	ix
Preface	xi
Introduction and Overview	1	(10)
Constitutions and Policy: A Missing Link	2	(3)
Which Constitutional Rules and Policies?	5	(2)
Overview of the Book	7	(4)
What Does Theory Say?	11	(24)
Introduction	11	(3)
A Common Approach	14	(2)
Electoral Rules	16	(6)
Forms of Government	22	(3)
Related Ideas	25	(5)
What Questions Do We Pose to the Data?	30	(2)
The Empirical Agenda	32	(3)
Policy Measures and Their Determinants	35	(38)
Introduction	35	(2)
Fiscal Policy	37	(19)
Rent Extraction	56	(6)
Productivity and Policy	62	(11)
Electoral Rules and Forms of Government	73	(40)
Introduction	73	(1)
Which Countries and Years?	74	(7)
Electoral Rules	81	(13)
Forms of Government	94	(6)
Our Political Atlas	100	(5)
Constitutions, Performance and Covariates: A First Look	105	(8)
Cross-Sectional Inference: Pitfalls and Methods	113	(42)
Introduction	113	(3)
The Question	116	(5)
Simple Linear Regressions	121	(5)
Relaxing Conditional Independence	126	(10)
Relaxing Linearity	136	(16)
Multiple Constitutional States	152	(3)
Fiscal Policy: Variation across Countries	155	(32)
Introduction	155	(3)
Size of Government	158	(11)
Composition of Government	169	(10)
Budget Surplus	179	(4)
Concluding Remarks	183	(4)
Political Rents and Productivity: Variation across Countries	187	(32)
Introduction	187	(3)
Political Rents	190	(12)
Productivity	202	(13)
Concluding Remarks	215	(4)
Fiscal Policy: Variation across Time	219	(50)
Introduction	219	(2)
Methodology	221	(4)
Unobserved Common Events	225	(11)
Output Gaps	236	(16)
Elections	252	(15)
Concluding Remarks	267	(2)
What Have We Learned?	269	(10)
Theoretical Priors and Empirical Results	269	(7)
What Next?	276	(3)
Data Appendix	279	(8)
References	287	(10)
Name Index	297	(4)
Subject Index	301