Working Paper: NBER ID: w11396
Authors: Gene M. Grossman; Elhanan Helpman
Abstract: Polities differ in the extent to which political parties can pre-commit to carry out promised policy actions if they take power. Commitment problems may arise due to a divergence between the ex ante incentives facing national parties that seek to capture control of the legislature and the ex post incentives facing individual legislators, whose interests may be more parochial. We study how differences in "party discipline" shape fiscal policy choices. In particular, we examine the determinants of national spending on local public goods in a three-stage game of campaign rhetoric, voting, and legislative decision-making. We find that the rhetoric and reality of pork-barrel spending, and also the efficiency of the spending regime, bear a non-monotonic relationship to the degree of\nparty discipline.
Keywords: party discipline; pork-barrel politics; fiscal policy; political institutions
JEL Codes: D72; H41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| party discipline (D72) | pork-barrel spending rhetoric (D72) |
| pork-barrel spending rhetoric (D72) | actual spending levels (H72) |
| party discipline (D72) | actual spending levels (H72) |
| party discipline (D72) | expected welfare (D69) |
| expected welfare (D69) | actual spending levels (H72) |
| party discipline (D72) | spending in majority districts (D72) |
| party discipline (D72) | spending in minority districts (H76) |