The paper presents empirical findings regarding the economic policy consequences of constitutional arrangements, in three different dimensions. First, the data are consistent with several theoretical predictions about the consequences of electoral rules and forms of government for fiscal policy...

Inspired by the current European developments, we study equilibrium fiscal policy under alternative constitutional arrangements in a “federation” of countries. There are two levels of government: local and federal. Local policy redistributes across individuals and affects the probability of...

We present a theoretical model of a parliamentary democracy where electoral competition inside coalition governments induces higher spending than under single party governments. Policy preferences of parties are endogenous and derived from opportunistic reelection motives. The electoral rule...