How Do Institutions Shape Policy Making? The Transition from Parliamentarism to Presidentialism in Iitalian Local Governments
We study the effects of a transition from a parliamentarian to a presidential system on electoral and fiscal policy outcomes. We test the hypothesis that this type of institutional change translates into increased differentiation between the executive and the legislative power and that this has an impact on policy choices. Using pre- and post-reform panel data on elections and fiscal policy from Italian local governments, we exploit a unique natural experiment to provide empirical evidence on the increase in differentiation and to measure the impact of political change on the composition of public spending. We find that the reform fosters political differentiation. Furthermore, political changes are statistically significant determinants of expenditure in the three largest fields of public finance intervention.
Key words: Parliamentarism, presidentialism, local elections.
KeywordsFiscal Policy Salient Issue Large Party Divided Government Regional Fixed Effect
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