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AbstractFiscal rules are spreading fast among countries. However, why and when governments enact fiscal rules and strengthen their national fiscal legal frameworks are less well understood. This article argues that governments use fiscal rules to signal commitment to fiscal prudence to both creditors and national voters. It investigates this theoretical argument empirically by using a worldwide panel of countries from 1985 to 2015. The empirical analyses find robust evidence that fiscal rules enactment becomes more likely, and that fiscal rules stringency increases when government debt is high and in election years but less evidence that being under an IMF program increases the strength of fiscal rules.

A prevalent viewpoint is that wealth inequality leads to political inequality and that economic elites are more powerful when they control a larger wealth share. However, as wealth inequality changes are often endogenous, studying the political consequences of wealth concentration is
challenging. I study a 1919 Danish land reform that confiscated 20 to 25 percent of the value of entailed estates, which were old aristocratic land and capital holdings. Using difference-in-difference estimation, I assess the political effects of this shock to local wealth inequality. I find
no effect of a wealth inequality decrease on pro-elite political outcomes. These results question the degree to which wealth inequality matters for political equality under widely held political rights and strong rule of law.

AbstractThe "democratic advantage" in access to credit markets has been vigorously researched. Recent research has found that this "autocratic disadvantage" can be partly countered by other factors. However, this research agenda has largely ignored an increasingly important type of institution of direct importance for national fiscal policy, fiscal rules. This article argues that fiscal rules alleviate the "autocratic disadvantage" in sovereign bond market access. This argument is tested on a dataset on fiscal rules and sovereign bond issuing data covering 121 countries from 1990 to 2015. The results provide substantial evidence in favor of the argument, autocracies with fiscal rules face no disadvantage in bond market access and might even be more likely to issue new government bonds than democracies.

AbstractA growing literature investigates how historical state repression affects later political outcomes, but little attention has been given to whether violence during foreign occupation affects support for international cooperation. This article investigates this issue by analyzing the 1972 Danish referendum on membership in the European Economic Community (eec)—an organization seen at the time as being dominated by Germany. The analysis shows that municipalities that experienced more German-inflicted violence during the German occupation of Denmark (1940–1945) in World War II had a higher rate of no votes in this referendum. This effect seems to have worked through increased support for Danish far-left parties that were associated with the Danish resistance movement and that actively used anti-German sentiment in their campaigns against eec membership. The results suggest that foreign-inflicted violence can be a substantial hindrance for popular support for international cooperation and that political parties play an important role in translating historical grievances into mass political behavior.

A growing literature has argued that electoral turnout decreases the more government policy constrained by economic and institutional factors. This paper investigates whether a certain type of policy constraint, fiscal rules, lowers turnout. Since fiscal rules set limits for government fiscal policy, they should lower the incentive for citizens to participate electorally. However, using parliamentary turnout data in a large panel of democratic countries, little robust evidence is found in favor of fiscal rules having a depressing effect on electoral turnout. Analysis of European individual-level data also suggests that national fiscal rules do not affect inequality in electoral turnout between income groups either. Difference-in-discontinuity evidence from Italian municipalities further suggests that the results are causally identified.

According to both early empirical findings and theoretical expectations of partisan preferences, left-wing parties in government ought to prefer higher levels of public employment for both ideological and opportunistic reasons. In contrast, using country-fixed effects in a panel of 22 Organisation for Economic Co-operation and Development countries, this article finds no evidence of left-wing governments systematically increasing public employment. However, there is evidence that left-wing governments increase public employment in election years, which gives rise to an opportunistic, partisan-electoral cycle in public employment. In line with the logic of core-voter targeting and political budget cycles, incumbent left-wing parties seem to increase the number of their potential core voters when they are needed most.

AbstractHow does governments' ability to gain financing from oil income affect their behaviour? Numerous studies have explored the effects of oil wealth on countries' political characteristics, especially the level of democracy. Oil has also been associated with a significant electoral incumbency advantage across different political regimes. However, the relationship between oil wealth and incumbent governments' behaviour, including election‐year fiscal manipulation, has been studied to a lesser extent. This article argues that higher oil rents increase election‐year public spending as they provide national governments both with direct revenue and increased financing opportunities. However, fiscal transparency mitigates this effect. Consequently, oil‐induced electoral budget cycles decrease as fiscal transparency increases. Using a high‐quality measure of fiscal transparency in a panel of countries, robust evidence in favour of this argument is found. The findings suggest that many of the previous results on the political effects of oil, including incumbency advantage, might run through an election‐year spending channel, and that fiscal institutions might matter substantially for the political effects of oil.

According to both early empirical findings and theoretical expectations of partisan preferences, left-wing parties in government ought to prefer higher levels of public employment for both ideological and opportunistic reasons. In contrast, using country-fixed effects in a panel of 22 Organisation for Economic Co-operation and Development countries, this article finds no evidence of left-wing governments systematically increasing public employment. However, there is evidence that left-wing governments increase public employment in election years, which gives rise to an opportunistic, partisan-electoral cycle in public employment. In line with the logic of core-voter targeting and political budget cycles, incumbent left-wing parties seem to increase the number of their potential core voters when they are needed most.

AbstractA growing literature has argued that electoral turnout decreases the more government policy constrained by economic and institutional factors. This paper investigates whether a certain type of policy constraint, fiscal rules, lowers turnout. Since fiscal rules set limits for government fiscal policy, they should lower the incentive for citizens to participate electorally. However, using parliamentary turnout data in a large panel of democratic countries, little robust evidence is found in favor of fiscal rules having a depressing effect on electoral turnout. Analysis of European individual-level data also suggests that national fiscal rules do not affect inequality in electoral turnout between income groups either. Difference-in-discontinuity evidence from Italian municipalities further suggests that the results are causally identified.

AbstractLabour market regulation varies significantly, both within and between developed democracies. While there has been extensive research and debate in economics on the consequences of labour market regulation, the political causes for levels and changes in labour market regulation have received less scholarly attention. This article investigates a political economy explanation for differences in labour market regulation building on a theoretical argument that labour regulation can be used as a nonfiscal redistribution tool. Consequently, partisanship, the demand for redistribution and government budget constraint jointly determine whether labour market regulation will increase or decrease. Consistent with this argument, panel analyses from 33 Organisation for Economic Co-Operation and Development countries reveal that labour market regulation increases under left-wing governments that face increased market inequality and high government debt.