Revisiting the effect of supermajority requirements on fiscal outcomes

Abstract

AbstractI use matching methods on a panel of U.S. states over the period 1960–2008 to test whether the adoption of a supermajority requirement impacts state‐level expenditures and tax revenue. While two‐way fixed effects (TWFE) models show that general expenditures, welfare expenditures, and total tax revenue per capita are lower following adoption of a supermajority requirement, I also find evidence of heterogeneous treatment effects, and worse, violation of the common trends assumption. Matching estimates fail to support the conclusions of the TWFE models, suggesting that supermajority requirements do not have a robust effect on government expenditures or tax revenue.