Skip to main content

Cabinet Durability and Fiscal Discipline


We argue that short government durations in parliamentary democracies increase public spending by driving a political budget cycle. We present a revision of the standard political budget cycle model that relaxes the common (often implicit) assumption that election timing is fixed and known in advance. Instead, we allow cabinets to form expectations about their durability and use these expectations to inform their spending choices. The model predicts that (1) cabinets should spend more as their expected term in office draws to a close and (2) cabinets that outlive their expected duration should run higher deficits. Using data from 15 European democracies over several decades, we show that governments increase spending as their expected duration withers and run higher deficits as they surpass their forecasted life expectancy.

Corresponding author
David Fortunato is an Associate Professor, Texas A&M University, 2010 Allen Building, 4348 TAMU, College Station, TX 77843-4348 (
Matt W. Loftis is an Assistant Professor, Aarhus University, Bartholins Allé 7, 8000 Aarhus, Denmark (
Hide All

In addition to the editorial team and four anonymous reviewers, we are grateful to Despina Alexiadou, Timm Betz, Martin Bisgaard, Bill Clark, Jason Eichorst, Carsten Jensen, André Kaiser, Peter B. Mortensen, Oli Proksch, Guy Whitten, and Georg Vanberg, as well as participants of the 2016 Annual Meetings of the Public Choice Society and Southern Political Science Association for helpful comments and feedback. Replication files are available on the American Political Science Review Dataverse:

Hide All
Ahmed, Faisal Z. 2012. “The Perils of Unearned Foreign Income: Aid, Remittances, and Government Survival.” American Political Science Review 106 (01): 146–65.
Alesina, Alberto, and Perotti, Roberto. 1996. “Income Distribution, Political Instability, and Investment.” European Economic Review 40 (6): 1203–28.
Alt, James E., and Lassen, David Dreyer. 2006. “Transparency, Political Polarization, and Political Budget Cycles in OECD Countries.” American Journal of Political Science 50 (3): 530–50.
Annett, Anthony. 2001. “Social Fractionalization, Political Instability, and the Size of Government.” IMF Staff Papers, 48 (3): 561–92.
Bawn, Kathleen, and Rosenbluth, Frances. 2006. “Short versus Long Coalitions: Electoral Accountability and the Size of the Public Sector.” American Journal of Political Science 50 (2): 251–65.
Brender, Adi, and Drazen, Allan. 2005. “Political Budget Cycles in New versus Established Democracies.” Journal of Monetary Economics 52 (7): 1271–95.
Browne, Eric C., Frendreis, John P., and Gleiber, Dennis W.. 1984. “An “Events” Approach to the Problem of Cabinet Stability.” Comparative Political Studies 17 (2): 167–97.
Browne, Eric C., Frendreis, John P., and Gleiber, Dennis W.. 1986. “The Process of Cabinet Dissolution: An Exponential Model of Duration and Stability in Western Democracies.” American Journal of Political Science 30 (3): 628–50.
Bueno De Mesquita, Bruce, and Smith, Alastair. 2010. “Leader Survival, Revolutions, and the Nature of Government Finance.” American Journal of Political Science 54 (4): 936–50.
Carmignani, Fabrizio. 2009. “The Distributive Effects of Institutional Quality when Government Stability is Endogenous.” European Journal of Political Economy 25 (4): 409–21.
Chiba, Daina, Martin, Lanny W., and Stevenson, Randolph T.. 2015. “A Copula Approach to the Problem of Selection Bias in Models of Government Survival.” Political Analysis 23 (1): 4258.
Clark, William Roberts. 2009. Capitalism, not Globalism: Capital Mobility, Central Bank Independence, and the Political Control of the Economy. Ann Arbor, Michigan: University of Michigan Press.
Clark, William Roberts, Reichert, Usha Nair, Lomas, Sandra Lynn, and Parker, Kevin L.. 1998. “International and Domestic Constraints on Political Business Cycles in OECD Economies.” International Organization 52 (01): 87120.
De Swaan, Abram. 1973. Coalition Theories and Cabinet Formations: A Study of Formal Theories of Coalition Formation Applied to Nine European Parliaments after 1918. Amsterdam: Elsevier.
Diermeier, Daniel, Eraslan, Hülya, and Merlo, Antonio. 2003. “A Structural Model of Government Formation.” Econometrica 71 (1): 2770.
Diermeier, Daniel, and Stevenson, Randy T.. 1999. “Cabinet Survival and Competing Risks.” American Journal of Political Science 43 (4): 1051–68.
Diermeier, Daniel, and Stevenson, Randolph T.. 2000. “Cabinet Terminations and Critical Events.” The American Political Science Review 94 (3): 627–40.
Duch, Raymond M., and Stevenson, Randy. 2010. “The Global Economy, Competency, and the Economic Vote.” The Journal of Politics 72 (01): 105–23.
Duch, Raymond M., and Stevenson, Randolph T.. 2011. “Context and Economic Expectations: When do Voters Get it Right?.” British Journal of Political Science 41 (01): 131.
Fortunato, David, Martin, Lanny W., and Vanberg, Georg. 2018. “Committee Chairs and Legislative Review in Parliamentary Democracies.” British Journal of Political Science In press.
Fortunato, David, and Turner, Ian R.. 2018. “Legislative Capacity and Credit Risk.” American Journal of Political Science 62: 623–36.
Goplerud, Max, and Schleiter, Petra. 2016. “An index of assembly dissolution powers.” Comparative Political Studies 49 (4): 427–56.
Harmel, Robert, and Robertson, John D.. 1986. “Government Stability and Regime Support: A Cross-National Analysis.” The Journal of Politics 48 (04): 1029–40.
Healy, Andrew, and Lenz, Gabriel S.. 2014. “Substituting the End for the Whole: Why Voters Respond Primarily to the Election-Year Economy.” American Journal of Political Science 58 (1): 3147.
Huber, John D. 1998. “How Does Cabinet Instability Affect Political Performance? Portfolio Volatility and Health Care Cost Containment in Parliamentary Democracies.” American Political Science Review 92 (03): 577–91.
Huber, John D., and Martinez-Gallardo, Cecilia. 2008. “Replacing Cabinet Ministers: Patterns of Ministerial Stability in Parliamentary Democracies.” American Political Science Review 102 (02): 169–80.
Kayser, Mark Andreas. 2005. “Who Surfs, Who Manipulates? The Determinants of Opportunistic Election Timing and Electorally Motivated Economic Intervention.” American Political Science Review 99 (01): 1727.
Kayser, Mark Andreas, and Lindstädt, René. 2015. “A Cross-National Measure of Electoral Competitiveness.” Political Analysis 23 (2): 242–53.
King, Gary, Alt, James E., Burns, Nancy Elizabeth, and Laver, Michael. 1990. “A Unified Model of Cabinet Dissolution in Parliamentary Democracies.” American Journal of Political Science 34 (3): 846–71.
Laakso, Markku, and Taagepera, Rein. 1979. “Effective Number of Parties: A Measure with Application to Western Europe.” Comparative Political Studies 12: 3.
Laver, Michael. 2003. “Government Termination.” Annual Review of Political Science 6 (1): 2340.
Laver, Michael, and Shepsle, Kenneth A.. 1994. Cabinet Ministers and Parliamentary Government. Cambridge, United Kingdom: Cambridge University Press.
Laver, Michael, and Shepsle, Kenneth A.. 1998. “Events, Equilibria, and Government Survival.” American Journal of Political Science 42 (1): 2854.
Lowe, Will, Benoit, Kenneth, Mikhaylov, Slava, and Laver, Michael. 2011. “Scaling Policy Preferences from Coded Political Texts.” Legislative Studies Quarterly 36 (1): 123–55.
Lupia, Arthur, and Strøm, Kaare. 1995. “Coalition Termination and the Strategic Timing of Parliamentary Elections.” The American Political Science Review 89 (3): 648–65.
MacRae, C. Duncan. 1977. “A political model of the business cycle.” Journal of Political Economy 85 (2): 239–63.
Martin, Lanny W., and Vanberg, Georg. 2013. “Multiparty Government, Fiscal Institutions, and Public Spending.” The Journal of Politics 75 (4): 953–67.
Merlo, Antonio. 1997. “Bargaining over Governments in a Stochastic Environment.” Journal of Political Economy 105 (1): 101–31.
Muth, John F. 1961. “Rational expectations and the theory of price movements.” Econometrica: Journal of the Econometric Society 29 (3): 315–35.
Nordhaus, William D. 1975. “The political business cycle.” The Review of Economic Studies 42 (2): 169–90.
Perry, Robert L., and Robertson, John D.. 1998. “Political Markets, Bond Markets, and the Effects of Uncertainty: A Cross-National Analysis.” International Studies Quarterly 42 (1): 131–59.
Persson, Torsten, Roland, Gerard, and Tabellini, Guido. 2007. “Electoral Rules and Government Spending in Parliamentary Democracies.” Quarterly Journal of Political Science 2 (2): 155–88.
Persson, Torsten, and Tabellini, Guido Enrico. 2005. The Economic Effects of Constitutions. Cambridge, Massachusetts: MIT Press.
Philips, Andrew Q. 2016. “Seeing the Forest through the Trees: A Meta-Analysis of Political Budget Cycles.” Public Choice 168 (3-4): 313–41.
Powell, G. Bingham. 2000. Elections as Instruments of Democracy: Majoritarian and Proportional Visions. New Haven, Connecticut: Yale University Press.
Rose, Shanna. 2006. “Do Fiscal Rules Dampen the Political Business Cycle?.” Public Choice 128 (3-4): 407–31.
Schleiter, Petra, and Tavits, Margit. 2016. “The electoral benefits of opportunistic election timing.” The Journal of Politics 78 (3): 836–50.
Seki, Katsunori, and Williams, Laron K.. 2014. “Updating the Party Government Data Set.” Electoral Studies 34: 270–79.
Shao, Jun. 2003. Mathematical Statistics. New York: Springer.
Smith, Alastair. 2003. “Election Timing in Majoritarian Parliaments.” British Journal of Political Science 33 (03): 397418.
Strøm, Kaare. 1985. “Party Goals and Government Performance in Parliamentary Democracies.” American Political Science Review 79 (03): 738–54.
Warwick, Paul. 1979. “The Durability of Coalition Governments in Parliamentary Democracies.” Comparative Political Studies 11 (4): 465–98.
Warwick, Paul. 1994. Government Survival in Parliamentary Democracies. Cambridge, United Kingdom: Cambridge University Press.
Williams, Laron K., and Whitten, Guy D.. 2012. “But Wait, There’s More! Maximizing Substantive Inferences from TSCS Models.” The Journal of Politics 74 (3): 685–93.
Woldendorp, Jaap J., Keman, Hans, and Budge, Ian. 2013. Party Government in 48 Democracies (1945–1998): Composition—Duration—Personnel. Berlin, Germany: Springer Science & Business Media.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

American Political Science Review
  • ISSN: 0003-0554
  • EISSN: 1537-5943
  • URL: /core/journals/american-political-science-review
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
Type Description Title
Supplementary materials

Fortunato and Loftis Dataset

Supplementary materials

Fortunato and Loftis supplementary material
Fortunato and Loftis supplementary material

 PDF (361 KB)
361 KB


Altmetric attention score

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed