Markku Harrinvirta &
Mikko Mattila
Department of Political Science
P.O. Box 54
FIN-00014 University of Helsinki
Finland
E-mail: mmattila@valt.helsinki.fi
Abstract
Reduction of budget deficits and public debts has become of central importance in modern democracies. Our results show that during election years governments avoid raising taxes which leads to bigger deficits. Also the number of parties in government coalitions is an important determinant of public expenditures and taxation. Multiparty governments are likely to spend more and have higher levels of taxation leading to increased size of the public sector. One-party governments with centralised and multiparty governments with decentralised labour markets were equally successful in their budget-balancing efforts. In one-party government systems fiscal consolidation was achieved via spending cuts. In corporatist systems expenditures continued to increase and consequently budget balance was sought through tax increases. Multiparty governments with decentralised labour markets were not as likely to be successful in their deficit management.
Here is to whole text as a pdf file.
And here is the data we used in the analysis in spss or in rats format.
Finally, here are some explanations about the variables in the datasets.