Thomas R. Cusack, Susanne Fuchs
Ideology, Institutions, and Public Spending

One of the hallmarks of the twentieth century was the widespread propensity for government to increase its role and size inside national economies. The general pattern observed among what today constitute many of the OECD countries was for government to double its size relative to the economy every 50 years or so. We have been able to show how politics has affected the course of this development over the long term. In addition, we have paid particular attention to political institutional factors and how these help shape decisions on public spending in the short term. More specifically, we have presented a model that brings to bear both the ideological preferences of governing parties and the institutional context in which government must operate. This model highlights the importance a favorable legislative institutional context for the successful achievement of government's preferred policy outcome, be it an expansion or a contraction of the size of the budget. Absent such an environment, governments are constrained to accepting the status quo.

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51 pages