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We analyze the effects of political fragmentation on fiscal policy in a number of ways, considering three kinds of fragmentation: size & control, institutional, & over time. In doing so we introduce a number of new variables that allow us to look at this issue in a broader way. At the same time we have tackled some methodological problems that affected previous analyses, using a panel of 19 OECD countries, 1975-1995. Overall, we find relatively poor evidence in favor of size & over-time fragmentation, & more evidence of institutional & control fragmentation. 7 Tables, 24 References. Adapted from the source document.

The purpose of this article is to provide an economic analysis of the relationship between economic integration and political fragmentation. This follows previous contributions from Alesina et al (2000), Casella (2001, Casella and Feinstein (2002), or Leite-Monteiro and Sato (2003). We go a step further than these authors by assuming that economic integration and political fragmentation are both decided by a majority vote. As them, we observe that economic integration involves political fragmentation. But, we establish also that economic integration might be sometimes deterred by the majority to prevent political fragmentation from happening.

The purpose of this article is to provide an economic analysis of the relationship between economic integration and political fragmentation. This follows previous contributions from Alesina et al (2000), Casella (2001, Casella and Feinstein (2002), or Leite-Monteiro and Sato (2003). We go a step further than these authors by assuming that economic integration and political fragmentation are both decided by a majority vote. As them, we observe that economic integration involves political fragmentation. But, we establish also that economic integration might be sometimes deterred by the majority to prevent political fragmentation from happening.

One line of research finds the size of the deficit to be positively correlated with the number of political actors. This 'political fragmentation' hypothesis has been tested on OECD countries. We successfully replicate Volkerink and de Haan's (Public Choice 109:221–242, 2001) model on an OECD sample. However, when we add ten non-OECD countries, the effect of political fragmentation disappears. We argue that the importance of political fragmentation varies according to the institutionalization of political systems. When we interact the age of a democracy with political fragmentation, we find that legislative fractionalisation increases the budget deficit as a democracy becomes more institutionalised.

Italy's political economy is characterized by international weakness and internal fragmentation and polarization. Since 1947, Italy's foreign economic policies have been defined by a broadly-based political and social coalition dominated by the Christian Democratic party (DC). This coalition has incorporated or maintained close links with ministerial bureaucracies, the Bank of Italy, state-controlled industrial and commercial enterprises, large corporations, and Catholic trade unions. It has attempted to foster a postwar climate receptive to business interests and to foreign investment; one which would facilitate the maintenance of a stable domestic political and social order. At the same time, the DC coalition is so fragmented by factionalism and personal competition that economic policy making has lacked direction and has been marked by personalism and by improvisation. Italian policy makers operate in a precarious environment in that they must use political and economic weaknessin order to mobilize the international assistance needed to maintain the internal social order as well as external economic survival.

Large national databases are culled to analyze the orientations of the adherents of the main political parties in 12 Western European countries, 1973-1989. Although clear traces of ongoing deideologization as well as pluralization were expected, this proved to be inaccurate. Each of these processes seems to follow a different path of development in distinct countries & distinct party families. A general "decline-of-the-party" or an "end-of-ideology" is not found among adherents of the main parties in Western Europe. 3 Tables, 5 Figures, 1 Appendix, 21 References. Adapted from the source document.