Government Weakness and Local Public Debt Development in Flemish Municipalities
By John Ashworth, Benny Geys, Bruno Heyndels. 2005
239 citations recorded by the source corpus.
The Weak Government Hypothesis states that government fragmentation leads to higher public deficits and debt. This relation can be explained by government inaction, common pool problems or the strategic use of debt that arise in coalition governments. Importantly, whereas government inaction models concentrate on the short-term effects of government fragmentation on indebtedness, common pool and strategic debt models imply that such effects will persist in the long term. We test these hypotheses using a large panel of data on municipal debt in 298 Flemish municipalities (1977–2000). We find that there is no long-run effect from weak governments. However, there is general support for the fact that the number of parties in a coalition has a positive effect on the municipality’s short-term debt levels–in line with government inaction models.
Subfields: Economics and Econometrics, Political Science and International Relations
View Paper: https://www.semanticscholar.org/paper/57e13d78358a2e2f06373acdbaf2afa682964481
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Citations in the corpus
- The perfect finance minister: Whom to appoint as finance minister to balance the budget? (2014, unknown): “Ashworth, Geys, and Heyndels (2005) and Wehner (2010) present extensive surveys of the empirical contributions on the common pool problem arising of political fragmentation.”
- Institutional Performance and Social Capital: An Application to the Local Government Level (2005, background): “We nonetheless include this variable as recent empirical evidence has shown that government fragmentation significantly affects the government’s decision-making process in Flemish municipalities (e.g., Ashworth, Geys, & Heyndels, 2005, 2006 ).”