The literature on estimating macroeconomic effects of fiscal policy requires suitable instruments to identify exogenous and unanticipated spending shocks. So far, the instrument of choice has been military build-ups. This instrument, however, largely limits the analysis to the US as few other...

We estimate the fiscal multiplier associated with shocks to government spending. We consider increases in government spending in the U.S. states in the wake of natural disasters to capture spending shocks that are both unexpected and unrelated to the preceding state of the economy. We find that...

In the last two decades of the XIX century Italy became an industrial country. Historians maintain that this process was affected by the action of some interest groups that pursued both state protection from competition and specific public expenditure programs. Starting from the economic...

This study examines how quality of political institutions affects the distribution of government budget and how development of government spending in major sections shapes the political institutions in Iran. This question has become especially important due to recent international sanctions,...

This study examines how the quality of political institutions affects the distribution of the government budget in Iran. We first introduce a mechanism through which democracy can shift government expenditure from national defense (military) to productivity-enhancing public spending (e.g.,...

This paper explores the role of political stability on fiscal policy choices in a time-series analysis over 158 years on the Swiss federal level. We argue that the fiscal-commons problem of public finances is affected by the time-horizon of a finance minister. Arguably, the incentives for an...

The paper examines the question how fiscally strong and fiscally weak states respond to taxing autonomy at the state level, a subject that is currently under debate in Germany where states do have virtually no power to tax. We use a simple theoretical model that incorporates state surtaxes on...