Do term limits affect fiscal policy choices?

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 use a dynamic panel data estimation strategy to test this hypothesis in a sample of 52 countries over the period 1977–2000, using social and welfare spending and surplus as policy variables. We are unable to find significant differences between the fiscal policies of term-limited chief executives and other types of government, while when we look at presidential systems only, lame ducks appear to be more likely to cut public spending. This contrasts with previous empirical results based on US states and international data.