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Public Choice

, Volume 136, Issue 3–4, pp 255–267 | Cite as

Political fragmentation, fiscal deficits and political institutionalisation

  • Robert ElgieEmail author
  • Iain McMenamin
Article

Abstract

One line of research finds the size of the deficit to be positively correlated with the number of political actors. This ‘political fragmentation’ hypothesis has been tested on OECD countries. We successfully replicate Volkerink and de Haan’s (Public Choice 109:221–242, 2001) model on an OECD sample. However, when we add ten non-OECD countries, the effect of political fragmentation disappears. We argue that the importance of political fragmentation varies according to the institutionalization of political systems. When we interact the age of a democracy with political fragmentation, we find that legislative fractionalisation increases the budget deficit as a democracy becomes more institutionalised.

Keywords

Common-pool resource problem Fiscal deficit Political fragmentation Institutionalisation 

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Copyright information

© Springer Science+Business Media, LLC. 2008

Authors and Affiliations

  1. 1.Centre for International Studies, School of Law and GovernmentDublin City UniversityDublinIreland

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