Publications
- Separation of Powers and the Budget Process
- Download: PDF 252.33 KB
- by Helpman, Elhanan; Grossman, Gene
- We study budget formation in a model featuring separation of powers. In our model,
the legislature designs a budget bill that can include a cap on total spending and ear-marked allocations to designated public projects. Each project provides random bene
fits
to one of many interest groups. The legislature can delegate spending decisions to the
executive, who can observe the productivity of all projects before choosing which to
fund. However, the ruling coalition in the legislature and the executive serve different
constituencies, so their interests are not perfectly aligned. We consider settings that differ
in terms of the breadth and overlap in the constituencies of the two branches, and associate these with the political systems and circumstances under which they most naturally
arise. Earmarks are more likely to occur when the executive serves broad interests, while
a binding budget cap arises when the executives constituency is more narrow than that
of the powerful legislators.
- Publication Type: WCFIA Working Paper
- Published Date: June 2006
- Field of Interest: International Economics
- Helpman, Elhanan, and Gene Grossman. "Separation of Powers and the Budget Process." Working Paper 2008-0047, Weatherhead Center for International Affairs, Harvard University, June 2006.
