THE ROLE OF FISCAL AND POLITICAL INSTITUTIONS IN LIMITING THE SIZE OF STATE GOVERNMENT

摘要: In many states, tax and expenditure limits constrain government spending. All but one state have adopted balanced-budget rules. Some governors the power to veto individual budget items (the so-called line-item veto). This article reviews evidence linking fiscal political institutions taxation, spending, debt. It appears that properly designed are effective in containing growth of government. Constitutional been more successful than spending constraints established legislatively. Balanced-budget rules prohibit deficit carryover following year superior rifles allow carryover. Researchers identified two other relationships. First, there is reduce borrowing costs. Second, citizen initiative process has played a role controlling spending: states with spend less. State Spending Fiscal Controls United States, grown rapidly, nearly doubling since 1995. Population prices as well, at much slower rate. The result significant expansion real per capita expenditures. Although finances governments improved considerably last few years, overspending 1990s was major contributor problems plagued 2001-03. Conventional views do not offer justification for controls. For example, Downs (1957) argues elected officials provide public services consistent preferences median voter. From this perspective, politicians act maximize net benefits voter no need limit Similarly, Tiebout (1956) contends businesses individuals affect size by voting their feet, leaving jurisdictions levels they consider too high. view, competition between brings about right level Alternatively, special-interest view (Stigler 1971, Peltzman 1976, Becker 1983) Leviathan (Niskanen 1975, Brennan Buchanan 1979) predict influence lobbying groups behavior self-interested bureaucrats exceed what average desires. contrast conventional government, place far emphasis on play facilitating (and limiting) Certainly provision goods services, such police, courts, infrastructure. They also transfer programs. However, increasing concern over Economists others worry excessive results higher taxes that, turn, stifle economic activity (Barro Sala-i-Martin 1995 Engin Skinner 1996). arena, manifested various attempts establish citizens can use control Institutions Tax Expenditure Limitations limitations (TELs) attempt state's revenues or Most TELs increase expenditures personal income population plus inflation. Poulson (2005) reports 30 some form TEL limitation. majority (18) constitutional, while remaining (12) statutory. Statutory tend be weaker easier legislature modify avoid. early studies Abrams Dougan (1986), Cox Lowery (1990), Bails (1990) found ineffective …