Comparative Politics and Public Finance
by
Torsten Persson, Gérard Roland and Guido Tabellini
First Draft: June 19,
1998
This version: March 5, 1999
Abstract
We propose a model with micropolitical foundations to compare the
public finance outcomes under different political regimes.
Compared to a parliamentary regime, the institutions of a
presidential-congressional regime produce less incentives for
legislative cohesion, but entail a clearer separation of powers.
These features create important differences in public finance
outcomes. A parliamentary regime has redistribution towards a
majority, less underprovision of public goods, more rents to
politicians and a higher tax burden, whereas a
presidential-congressional regime has redistribution towards
powerful minorities, more underprovision of public goods, but
less rents to politicians and a smaller government. The
predictions regarding the size of government are consistent with
recent cross-country data.
JEL classification: H00, D72, D78.
Keywords: political economics, comparative politics, public
finance, separation of powers, legislative cohesion, electoral
accountability.