Consequences of Constitutions

No 10170, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The paper presents empirical findings regarding the economic policy consequences of constitutional arrangements, in three different dimensions. First, the data are consistent with several theoretical predictions about the consequences of electoral rules and forms of government for fiscal policy and rent extraction, even when non-random constitution selection is taken into account. Second, empirical tests of the predictions from a new comprehensive model of parliamentary democracy show that proportional elections raise government spending through their indirect consequences for party structures and types of government, rather than through their direct effects on policymaking incentives. Third, new empirical results suggest that constitutional arrangements may have important consequences for structural polices that promote long-run economic performance, hinting at a missing link in the causal chain from history to current economic performance. All these empirical findings appear statistically robust, and the estimated effects are large enough to be of genuine economic interest.

JEL-codes: D72 E60 (search for similar items in EconPapers)
Date: 2003-12
Note: PE
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Citations: View citations in EconPapers (11)

Published as Persson, Torsten. "Consequences of constitutions." Journal of the European Economic Association 2 (2004): 139-161.

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