Hostname: page-component-cd9895bd7-hc48f Total loading time: 0 Render date: 2025-01-05T05:16:20.941Z Has data issue: false hasContentIssue false
  • English
  • Français

Party, Ideology, and Deficits: Provincial Fiscal Policy and the Cameron Thesis, 1966–2009

Published online by Cambridge University Press:  30 April 2014

Christopher A. Simon  and
Raymond Tatalovich
Christopher A. Simon*
Affiliation:
University of Utah
Raymond Tatalovich*
Affiliation:
Loyola University Chicago
*
Department of Political Science, University of Utah, 260 S. Central Campus Drive, Orson Spencer Hall Room 252, Salt Lake City, UT 84112. Email: [email protected]
Department of Political Science, Loyola University Chicago, 1032 West Sheridan Road, Coffey Hall 315, Chicago, IL 60660. Email: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

In a 1985 publication David Cameron reported that historically leftist governments had governed with smaller deficits than rightist governments. The party ideology variable was incorporated into a large body of subsequent research, mainly by economists, to study the growth of public spending and indebtedness. Most agreed with Cameron; some did not. Virtually all studies focused on western European nations (but not subnational governments). This study analyzes provincial deficits or surpluses over the period 1966 to 2009 and determines that rightist parties, despite controls for economic and other political variables, have lower budgetary deficits, a finding which contradicts Cameron but is consistent with five previous studies of provincial spending in Canada.

Résumé

Dans une publication 1985, David Cameron a indiqué que les gouvernements de gauche historiquement avaient gouverné avec des déficits plus faibles que les gouvernements de droite. La variable de l'idéologie du parti a été intégrée dans un vaste corpus de recherches ultérieures, principalement par les économistes pour étudier la croissance des dépenses publiques et de l'endettement. La plupart étaient d'accord avec Cameron, d'autres pas; pratiquement toutes les études ont porté sur les pays d'Europe occidentale (mais pas les gouvernements infranationaux). Cette étude analyse les déficits ou les excédents provinciaux au cours de la période 1966–2009 et détermine que les partis de droite, malgré les contrôles pour les variables politiques, économiques et autres, ont des déficits budgétaires inférieurs, une conclusion qui contredit Cameron, mais est compatible avec cinq études antérieures sur les dépenses provinciales au Canada.

Type
Research Article
Information
Canadian Journal of Political Science/Revue canadienne de science politique , Volume 47 , Issue 1 , March 2014 , pp. 93 - 112
Copyright
Copyright © Canadian Political Science Association (l'Association canadienne de science politique) and/et la Société québécoise de science politique 2014 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Abizadeh, Sohrab and Gray, John A.. 1992. “Politics and Provincial Government Spending in Canada.” Canadian Public Administration, 35 (4): 519–33.CrossRefGoogle Scholar
Alt, James E. and Lowry, Robert. 1994. “Divided Government, Fiscal Institutions, and Budget Deficits: Evidence from the States.” American Political Science Review 88: 811–28.CrossRefGoogle Scholar
Alesina, Alberto. 1989. “Politics and Business Cycles in Industrial Democracies.” Economic Policy 8: 54–98.Google Scholar
Alesina, Alberto, Cohen, Gerald D. and Roubini, Nouriel. 1993. “Electoral Business Cycles in Industrial Democracies.” European Journal of Political Economy 9: 1–23.CrossRefGoogle Scholar
Arellano, Manuel and Bond, Stephen. 1991. “Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations.” Review of Economic Studies 58 (2): 277–97.CrossRefGoogle Scholar
Blais, André, Kim, Jiyoon and Foucault, Martial. 2010. “Public Spending, Public Deficits and Government Coalitions.” Political Studies 58: 829–46.CrossRefGoogle Scholar
Blais, André and Nadeau, Richard. 1992. “The Electoral Budget Cycle.” Public Choice 74 (4): 389–403.CrossRefGoogle Scholar
Blejer, Mario I. and Cheasty, Adrienne. 1991. “The Measurement of Fiscal Deficits: Analytical and Methodological Issues.” Journal of Economic Literature 29 (4): 1644–78.Google Scholar
Bodet, Marc André. 2013. “Representation at the Margins: The Impact of Governing Parties on Spending in Canada.” Party Politics 19 (4): 665–82.CrossRefGoogle Scholar
Boix, Carles. 1997. “Political Parties and the Supply Side of the Economy: The Provision of Physical and Human Capital in Advanced Economies, 1960–90.” American Journal of Political Science 41 (3): 814–45.CrossRefGoogle Scholar
Borrelli, Stephen A. and Royed, Terry J.. 1995. “Government ‘Strength’ and Budget Deficits in Advanced Democracies.” European Journal of Political Research 28: 225–60.CrossRefGoogle Scholar
Bräuninger, Thomas. 2005. “A Partisan Model of Government Expenditure.” Public Choice 125 (3/4): 409–29.CrossRefGoogle Scholar
Carlsen, Fredrik. 1997. “Counterfiscal Policies and Partisan Politics: Evidence from Industrialized Countries.” Applied Economics 29: 145–51.CrossRefGoogle Scholar
Cameron, David R. 1985. “Does Government Cause Inflation? Taxes, Spending, and Deficits.” In The Politics of Inflation and Economic Stagnation, ed. Lindberg, Leon N. and Maier, Charles S.. Washington DC: Brookings Institution.Google Scholar
Castles, Francis G. and Mair, Peter. 1984. “Left-Right Political Scales: Some ‘Expert’ Judgments.” European Journal of Political Research 12: 73–88.CrossRefGoogle Scholar
Clemens, Jeffrey and Miran, Stephen. 2012. “Fiscal Policy Multipliers on Subnational Government Spending.” American Economic Journal: Economic Policy 4 (2): 46–68.Google Scholar
Cox, Gary W. and McCubbins, Mathew D.. 1991. “Divided Control of Fiscal Policy.” In The Politics of Divided Government, ed. Cox, Gary W. and Kernell, Samuel. Boulder CO: Westview Press.Google Scholar
Cowart, Andrew T. 1978. “The Economic Policies of European Governments, Part II: Fiscal Policy.” British Journal of Political Science 8: 425–39.CrossRefGoogle Scholar
Cusack, Thomas R. 1999. “Partisan Politics and Fiscal Policy. Comparative Political Studies 32: 464–86.CrossRefGoogle Scholar
De Haan, Jakob and Sturm, Jan-Egbert. 1997. “Political and Economic Determinants of OECD Budget Deficits and Government Expenditures: A Reinvestigation.” European Journal of Political Economy 13: 739–50.CrossRefGoogle Scholar
De Hann, Jakob and Sturm, Jan-Egbert. 1994. “Political and Institutional Determinants of Fiscal Policy in the European Community.” Public Choice 80: 157–72.CrossRefGoogle Scholar
Dye, Thomas. 1966. Politics, Economics, and the Public. Chicago: Rand McNally.Google Scholar
Edin, Per-Anders and Ohlsson, Henry. 1991. “Political Determinants of Budget Deficits: Coalition Effects versus Minority Effects.” European Economic Review 35: 1597–1603.CrossRefGoogle Scholar
Frey, Bruno and Schneider, Friedrich. 1979. “An Econometric Model with an Endogenous Government Sector.” Public Choice 34: 25–45.Google Scholar
Frey, Bruno and Schneider, Friedrich. 1978a. “A Political-Economic Model of the United Kingdom.” Economic Journal 88: 243–54.CrossRefGoogle Scholar
Frey, Bruno and Schneider, Friedrich. 1978b. “An Empirical Study of Politico-Economic Interaction in the United States.” The Review of Economics and Statistics 60: 174–83.CrossRefGoogle Scholar
Garand, James C. 1988. “Explaining Government Growth in the U.S. States.” American Political Science Review 82: 837–49.CrossRefGoogle Scholar
Garrett, Geoffrey. 1998. Partisan Politics in the Global Economy. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Garrett, Geoffrey. 1996. “Capital Mobility, Trade, and the Domestic Politics of Economic Policy.” In Internationalization and Domestic Politics, ed. Keohane, Robert O. and Milner, Helen V.. Cambridge: Cambridge University Press.Google Scholar
Garrett, Geoffrey and Lange, Peter. 1991. “Political Responses to Interdependence: What's‘Left’ for the Left?” International Organization 45: 539–69.CrossRefGoogle Scholar
Geist, Michael A. 1997–1998. “Balanced Budget Legislation: An Assessment of the Recent Canadian Experience.” Ottawa Law Review 29: 1–38.Google Scholar
Grilli, Vittorio, Masciandaro, Donato, Tabellini, Guido, Malinvaud, Edmond and Pagano, Marco. 1991. “Political and Monetary Institutions and Public Financial Policies in the Industrial Countries.” Economic Policy 6 (13): 341–92.CrossRefGoogle Scholar
Hahm, Sung Deuk, Kamlet, Mark S. and Mowery, David C.. 1995. “Influences on Deficit Spending in Industrialized Democracies.” Journal of Public Policy 15: 183–97.CrossRefGoogle Scholar
Hahm, Sung Deuk, Kamlet, Mark S. and Mowery, David C.. 1996. “The Political Economy of Deficit Spending in Nine Industrialized Parliamentary Democracies: The Role of Fiscal Institutions.” Comparative Political Studies 29: 52–77.CrossRefGoogle Scholar
Huber, John and Inglehart, Ronald. 1995. “Expert Interpretations of Party Space and Party Locations in 42 Societies.” Party Politics 1: 73–111.CrossRefGoogle Scholar
Kneebone, Ronald D. 1994. “Deficits and Debt in Canada: Some Lessons from Recent History.” Canadian Public Policy 20 (2): 152–64.CrossRefGoogle Scholar
Kneebone, Ronald D. and McKenzie, Kenneth. 1999. Past (In)Discretions: Canadian Federal and Provincial Fiscal Policy.” Toronto: University of Toronto Press, Centre for Public Management.Google Scholar
Kneebone, Ronald D. and McKenzie, Kenneth J.. 2001. “Electoral and Partisan Cycles in Fiscal Policy: An Examination of Canadian Provinces.” International Tax and Public Finance 8: 753–74.CrossRefGoogle Scholar
Mahdavi, Saeid and Westerlund, Joakim. 2011. “Fiscal Stringency and Fiscal Sustainability: Panel Evidence from the American State and Local Governments.” Journal of Policy Modeling 33: 953–69.CrossRefGoogle Scholar
McCubbins, Mathew D. 1991. “Government on Lay-Away: Federal Spending and Deficits Under Divided Party Control.” In The Politics of Divided Government, ed. Cox, Gary W. and Kernell, Samuel, Boulder CO: Westview Press.Google Scholar
Mileva, Elitza. 2007. “Using Arellano-Bond Dynamic GMM Estimators in STATA.” Paper presented at Department of Economics, Fordham University, July 9. http://www.fordham.edu/economics/mcleod/Elitz-UsingArellano%E2%80%93BondGMMEstimators.pdf (August 29, 2013).Google Scholar
Pétry, François, Imbeau, Louis M., Crête, Jean and Clavet, Michel. 1999. “Electoral and Partisan Cycles in the Canadian Provinces.” Canadian Journal of Political Science 32 (2): 273–92.CrossRefGoogle Scholar
Philipps, Lisa C. 1997. “The Rise of Balanced Budget Laws in Canada: Legislating Fiscal (Ir)responsibility.” Osgoode Hall Law Journal 34: 681–740.CrossRefGoogle Scholar
Pommerehne, Werner W. 1978. “Institutional Approaches to Public Expenditure: Empirical Evidence from Swiss Municipalities.” Journal of Public Economics 9: 255–80.CrossRefGoogle Scholar
Poterba, James. 1996. “Budget Institutions and Fiscal Policy in the U.S. States.” American Economic Review 86: 395–400.Google Scholar
Poterba, James. 1995. “Balanced Budget Rules and Fiscal Policy: Evidence from the States.” National Tax Journal 48 (3): 329–36.CrossRefGoogle Scholar
Rodden, Jonathan and Wibbels, Erik. 2010. “Fiscal Decentralization and the Business Cycle: An Empirical Study of Eight Federations.” Economics & Politics 22 (1): 37–67.CrossRefGoogle Scholar
Roodman, David 2009. “How to do xtabond2: An Introduction to difference and system GMM in Stata.” The Stata Journal 9 (1): 86–136.CrossRefGoogle Scholar
Roubini, Nouriel and Sachs, Jeffrey D., 1989. “Political and Economic Determinants of Budget Deficits in the Industrialized Democracies,” European Economic Review 33: 903–38.CrossRefGoogle Scholar
Roubini, Nouriel, Sachs, Jeffrey D., Honkapohja, Seppo and Cohen, Daniel. 1989. “Government Spending and Budget Deficits in the Industrial Democracies,” Economic Policy 8: 100–32.Google Scholar
Sakamoto, Takayuki. 2001. “Effects of Government Characteristics on Fiscal Deficits in 18 OECD Countries, 1961–1994.” Comparative Political Studies 34: 527–54.CrossRefGoogle Scholar
Saunders, Peter and Klau, Friedrich. 1985. “The Role of the Public Sector: Causes and Consequences of the Growth of Government.” OEDC Economic Studies 4.Google Scholar
Simpson, Wayne and Wesley, Jared J.. 2012. “Effective Tool or Effectively Hollow? Balanced Budget Legislation in Western Canada.” Canadian Public Policy 38: 291–313.Google Scholar
Sørensen, Bent E., Wu, Lisa and Yosha, Oved. 2001. “Output Fluctuations and Fiscal Policy: U.S. State and Local Governments 1978–1994.” European Economic Review 45: 1271–1310.CrossRefGoogle Scholar
Tapp, Stephen. 2013. “The Use and Effectiveness of Fiscal Rules in Canadian Provinces.” Canadian Public Policy 39 (1): 45–70.CrossRefGoogle Scholar
Tavares, José. 2004. “Does Right or Left Matter? Cabinets, Credibility and Fiscal Adjustments.” Journal of Public Economics 88: 2447–68.CrossRefGoogle Scholar
Tellier, Geneviève. 2006. “Public Expenditures in Canadian Provinces: An Empirical Study of Politico-Economic Interactions.” Public Choice 126 (3/4): 367–85.CrossRefGoogle Scholar
Wildavsky, Aaron. 1964. The Politics of the Budgetary Process. Boston MA: Little, Brown.Google Scholar
Windmeijer, Frank. 2005. “A Finite Sample Correction for the Variance of Linear Efficient Two-Step GMM Estimators.” Journal of Econometrics 126: 25–51.CrossRefGoogle Scholar