Abstract
This paper presents new evidence on the hypothesis that coalition governments will find it more difficult to keep their budgets in line after an adverse economic shock than do one-party, majoritarian governments. The estimates are based on a broad sample of OECD countries, for the period 1979–1995. Using various specifications as suggested in the literature, we do not find evidence that the type of government affects cross country variation in fiscal policy. However, the number of political parties in government affects central government debt growth.
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de Haan, J., Sturm, JE. & Beekhuis, G. The Weak Government Thesis: Some New Evidence. Public Choice 101, 163–176 (1999). https://doi.org/10.1023/A:1018326917813
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DOI: https://doi.org/10.1023/A:1018326917813