The fiscal benefits of repeated cooperation: coalitions and debt dynamics in 36 democracies

Weisstanner, David (2017). The fiscal benefits of repeated cooperation: coalitions and debt dynamics in 36 democracies. Journal of public policy, 37(02), pp. 143-172. Cambridge University Press 10.1017/S0143814X16000040

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Do coalition governments really suffer from short time horizons in fiscal policymaking, as posited by standard political-economy models? This article focusses on coalitions that have created high levels of familiarity through shared governing experiences in the past and that are likely to cooperate again in future governing coalitions. I argue that such coalitions have incentives to internalise the future costs of debt accumulation and reach credible agreements to balance their constituencies’ fiscal preferences. Moreover, sustaining broad coalitions should have electoral advantages to implementing controversial economic reforms, thus resulting in lower debt increases compared not only with less durable coalitions but also with single-party governments. Comparing 36 economically advanced democracies between (up to) 1962 and 2013, I estimate the effects of coalitions’ cooperation prospects on the dynamics of public debt. The findings indicate that long time horizons can help coalitions to overcome intertemporal coordination problems and to reach specific policy goals.

Item Type:

Journal Article (Original Article)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Social Sciences > Institute of Political Science

UniBE Contributor:

Weisstanner, David

Subjects:

300 Social sciences, sociology & anthropology > 320 Political science

ISSN:

0143-814X

Publisher:

Cambridge University Press

Language:

English

Submitter:

David Weisstanner

Date Deposited:

04 Jul 2017 16:14

Last Modified:

21 Mar 2018 17:31

Publisher DOI:

10.1017/S0143814X16000040

BORIS DOI:

10.7892/boris.97402

URI:

https://boris.unibe.ch/id/eprint/97402

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