Political Fragmentation and Fiscal Outcomes

Abstract

In this paper we develop the analysis of the effects on political fragmentation on fiscal policy in a number of ways. We analyze three kinds of fragmentation: Size and control, institutional and over time fragmentation. In doing so we introduce a number of new variables that allow us to look at this issue in a broader way. At the same time we have tackled some methodological problems that have affected previous analyses, using a panel of 19 OECD countries over 1975-1995. Overall we find relatively poor evidence in favor of size and over time fragmentation, and more relevance for institutional and control fragmentation.