Working Paper: CEPR ID: DP1737
Authors: Torsten Persson; Gerard Roland; Guido Tabellini
Abstract: This paper presents a model of electoral accountability to compare the public finance outcomes under a presidential-congressional and a parliamentary system. In a presidential-congressional system, contrary to a parliamentary system, there are no endogenous incentives for legislative cohesion, but this allows for a clearer separation of powers. These features lead to clear differences in the public finance performance of the two systems. A parliamentary system has redistribution towards a majority, less underprovision of public goods, more waste and a higher burden of taxation, whereas a presidential-congressional system has redistribution towards a minority, more underprovision of public goods, but less waste and a smaller size of government.
Keywords: Political Economics; Comparative Politics; Public Finance; Separation of Powers; Legislative Cohesion; Electoral Accountability
JEL Codes: D72; D78; H00
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| parliamentary system (D72) | less underprovision of public goods (H42) |
| parliamentary system (D72) | more waste (L99) |
| parliamentary system (D72) | higher tax burden (H22) |
| presidential-congressional system (D72) | more underprovision of public goods (H42) |
| presidential-congressional system (D72) | less waste (L99) |
| presidential-congressional system (D72) | smaller government size (H11) |
| clearer separation of powers in presidential systems (D72) | mitigates waste (L99) |
| clearer separation of powers in presidential systems (D72) | reduces overall government size (H19) |
| absence of legislative cohesion in presidential systems (D72) | significant underprovision of public goods (H42) |
| absence of legislative cohesion in presidential systems (D72) | inefficient redistribution (H23) |
| parliamentary systems (D72) | higher public goods provision (H49) |