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Empirical Applications of Veto Player Analysis and Institutional Effectiveness

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Reform Processes and Policy Change

Part of the book series: Studies in Public Choice ((SIPC,volume 16))

Abstract

Many studies consider the veto players in government and move directly to discussions of policy choice and policy change. Institutions in such studies are relevant only to the extent that they determine whether a given player is truly a veto player, and they are exogenously determined. In this chapter, I begin with a review of this research and of the veto player agenda more generally. The review indicates that veto player analysis is a powerful tool in a variety of institutional settings. In the second part of the chapter, I argue that veto players affect the institutions that are chosen to structure decision making. Moreover, the effectiveness of those institutions depends on the ideological distance among veto players. Institutions put in place under a government with low ideological distance may not function well if the ideological distance increases under the next government. This chapter gives examples from the making of fiscal policy, but the concepts are applicable to other policy areas as well.

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Notes

  1. 1.

    Note that, in the consideration of the 2002 immigration bill, the German President, Johannes Rau, did serve as a true veto player. Yet such occasions are quite rare in the German system.

  2. 2.

    It should be noted that Tsebelis makes this argument in his original formulation of the theory. Many authors focus only on his coding rules for large-n studies, which are necessarily less detailed.

  3. 3.

    See Ganghof and Bräuninger (2006) for a spatial analysis and application to Denmark in particular that disputes this view.

  4. 4.

    They compute change in budget composition as the square root of the square of the change in nine budget categories as provided by the IMF’s Government Finance Statistics Yearbook.

  5. 5.

    As Tsebelis (2002, 84) notes, “some presidential systems may provide so many agenda setting powers to the president that they look parliamentary, and some parliamentary systems may take away so many agenda setting initiatives from the government that they look presidential.”

  6. 6.

    To be clear, Immergut (1992) in practice discusses “veto points” instead of “veto gates,” but the concept is the same – one should pay attention to the number of veto points that a bill must traverse to become law.

  7. 7.

    Crepaz’ (2002) competitive players include “federalism, bi-cameralism, central bank independence, and rigid constitutional structures (183).”

  8. 8.

    Wagschal’s (1999a, b) analyses have a similar coding.

  9. 9.

    See also Cox and McCubbins (2005). Many thanks to Christopher Carman for help wading through the Americanist literature.

  10. 10.

    Another way to do this type of review is to break down the work according to the somewhat different definitions of veto players that appear in the literature.

  11. 11.

    Exceptions include the edited volumes of Herbert Döring (1995) and Döring and Hallerberg (2004).

  12. 12.

    See also Zucchini (1998).

  13. 13.

    Volkerink and De Haan (2001) operationalize distance as “political fragmentation,” and they use the same formula as Franzese (2001) in one case and, following Tsebelis (1995), they also examine the maximum ideological distance between parties in coalition.

  14. 14.

    Ganghof (1999) also critiques earlier work by Uwe Wagschal (1999a) on the connection between veto players and tax reform; see Wagschal (1999b) for his response.

  15. 15.

    The calculation of tax burdens is based on the data set provided in Carey and Tchilinguirian (2000). Such calculations are not unproblematic, and Hallerberg and Basinger (2004) should be humble about how much they can read into their results. Yet they do use what is “best practice” among the different measures available.

  16. 16.

    Their index for veto points runs from 0 to 1. It considers party fragmentation within specific institutional veto players, their congruence, and whether or not there are strong courts. The original index is presented in Henisz (2000).

  17. 17.

    See also Henisz et al. (2005), where they find that increased veto players make it more likely that small investors come to a country because they have greater confidence that the policy environment will remain stable. In this way, veto players may make certain types of changes more likely – the possibility of stability makes reforms that open up markets feasible.

  18. 18.

    Indeed, an interesting extension of Hellman (1998) would be to look at the agenda-setter in the various governments.

  19. 19.

    The next two pages received inspiration from a shorter summary of the central bank literature in Hallerberg (2002).

  20. 20.

    They also take the log of the value before they include it in regressions.

  21. 21.

    Moser (2000) does note that, in cases where the coding is unclear, he looks at partisan control and rules a country as having no checks and balances if the same parties always control both houses. He does this in his coding for three countries – Belgium, Italy, and Japan.

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Authors and Affiliations

  1. Hertie School of Governance, Berlin, Germany

    Mark Hallerberg

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  1. Mark Hallerberg
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Editors and Affiliations

  1. Department of Political Science, University of Mannheim, Mannheim, 68131, Germany

    Thomas König

  2. Mannheim Center for European Research, University of Mannheim, Mannheim, 68131, Germany

    Marc Debus

  3. Dept. Political Science, University of Michigan, S. State St. 505, Ann Arbor, 48109-1045, USA

    George Tsebelis

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Hallerberg, M. (2011). Empirical Applications of Veto Player Analysis and Institutional Effectiveness. In: König, T., Debus, M., Tsebelis, G. (eds) Reform Processes and Policy Change. Studies in Public Choice, vol 16. Springer, New York, NY. https://doi.org/10.1007/978-1-4419-5809-9_2

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