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Does electoral accountability affect economic policy choices: evidence from gubernatorial term limits

By Timothy Besley and Anne Case


This paper analyzes the behavior of U. S. governors from 1950 to 1986 to investigate a reputation-building model of political behavior. We argue that differences in the behavior of governors who face a binding term limit and those who are able to run again provides a source of variation in discount rates that can be used to test a political agency model. We find evidence that taxes, spending, and other policy instruments respond to a binding term limit if a Democrat is in office. The result is a fiscal cycle in term-limit states, which lowers state income when the term limit binds

Topics: HB Economic Theory, JC Political theory
Publisher: Oxford University Press
Year: 1995
DOI identifier: 10.2307/2946699
OAI identifier:
Provided by: LSE Research Online
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