Munich Personal RePEc Archive

It's a matter of confidence: Institutions, government stability and economic outcomes

Bettareli, Luca and Cella, Michela and Iannantuoni, Giovanna and Manzoni, Elena (2017): It's a matter of confidence: Institutions, government stability and economic outcomes.

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Abstract

In this paper, we analyse the effect of constitutional structures on policy outcomes. In particular, we exploit heterogeneity in parliamentary systems deriving from the presence and the use of the confidence vote to investigate whether stable and unstable parliamentary systems behave differently in terms of the policy they implement. This finer partition of parliamentary systems allows us to identify effects that are more robust than those in the literature. We show that the difference between presidential and parliamentary systems documented in previous works is driven by a difference between presidential and stable parliamentary systems. We suggest that possible transmission channels are legislative cohesion and (the absence of) selection.

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