Chief Executives' Term Limits and Fiscal Policy Choices: International Evidence

According to reputational models of Political Economy, a term limit may change the behavior of a chief executive because he does not have to stand for election. We test this hypothesis in a sample of 59 countries over the period 1975-1997, using government spending, revenue, surplus and social and welfare spending as policy choice variables. We use both cluster analysis and panel data estimation techniques. We are unable to find significant differences in the behavior of term limited chief executives with respect to those who are not. This is in contrast with some previous empirical results on US states and international data.