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Does Electoral Accountability Affect Economic Policy Choices? Evidence from Gubernatorial Term Limits

Does Electoral Accountability Affect Economic Policy Choices? Evidence from Gubernatorial Term... Abstract This paper analyzes the behavior of U. S. governors from 1950 to 1986 to investigate a reputation-building model of political behavior. We argue that differences in the behavior of governors who face a binding term limit and those who are able to run again provides a source of variation in discount rates that can be used to test a political agency model. We find evidence that taxes, spending, and other policy instruments respond to a binding term limit if a Democrat is in office. The result is a fiscal cycle in term-limit states, which lowers state income when the term limit binds. * " We thank Larry Bartels, Stephen Coate, John Lott, Jr., two anonymous referees, and numerous seminar participants for helpful comments and discussions. Diane Lim Rogers and John Rogers generously provided us with data on state expenditures. Eugena Estes and Ann Hendry provided useful research assistance. We thank the Center for Economic Policy Studies, Princeton University, and the National Science Foundation for funding. This content is only available as a PDF. © 1995 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Quarterly Journal of Economics Oxford University Press

Does Electoral Accountability Affect Economic Policy Choices? Evidence from Gubernatorial Term Limits

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References (22)

Publisher
Oxford University Press
Copyright
© 1995 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology
ISSN
0033-5533
eISSN
1531-4650
DOI
10.2307/2946699
Publisher site
See Article on Publisher Site

Abstract

Abstract This paper analyzes the behavior of U. S. governors from 1950 to 1986 to investigate a reputation-building model of political behavior. We argue that differences in the behavior of governors who face a binding term limit and those who are able to run again provides a source of variation in discount rates that can be used to test a political agency model. We find evidence that taxes, spending, and other policy instruments respond to a binding term limit if a Democrat is in office. The result is a fiscal cycle in term-limit states, which lowers state income when the term limit binds. * " We thank Larry Bartels, Stephen Coate, John Lott, Jr., two anonymous referees, and numerous seminar participants for helpful comments and discussions. Diane Lim Rogers and John Rogers generously provided us with data on state expenditures. Eugena Estes and Ann Hendry provided useful research assistance. We thank the Center for Economic Policy Studies, Princeton University, and the National Science Foundation for funding. This content is only available as a PDF. © 1995 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

Journal

The Quarterly Journal of EconomicsOxford University Press

Published: Aug 1, 1995

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