Skip to main content Accessibility help

Party, Ideology, and Deficits: Provincial Fiscal Policy and the Cameron Thesis, 1966–2009

  • Christopher A. Simon (a1) and Raymond Tatalovich (a2)

In a 1985 publication David Cameron reported that historically leftist governments had governed with smaller deficits than rightist governments. The party ideology variable was incorporated into a large body of subsequent research, mainly by economists, to study the growth of public spending and indebtedness. Most agreed with Cameron; some did not. Virtually all studies focused on western European nations (but not subnational governments). This study analyzes provincial deficits or surpluses over the period 1966 to 2009 and determines that rightist parties, despite controls for economic and other political variables, have lower budgetary deficits, a finding which contradicts Cameron but is consistent with five previous studies of provincial spending in Canada.

Dans une publication 1985, David Cameron a indiqué que les gouvernements de gauche historiquement avaient gouverné avec des déficits plus faibles que les gouvernements de droite. La variable de l'idéologie du parti a été intégrée dans un vaste corpus de recherches ultérieures, principalement par les économistes pour étudier la croissance des dépenses publiques et de l'endettement. La plupart étaient d'accord avec Cameron, d'autres pas; pratiquement toutes les études ont porté sur les pays d'Europe occidentale (mais pas les gouvernements infranationaux). Cette étude analyse les déficits ou les excédents provinciaux au cours de la période 1966–2009 et détermine que les partis de droite, malgré les contrôles pour les variables politiques, économiques et autres, ont des déficits budgétaires inférieurs, une conclusion qui contredit Cameron, mais est compatible avec cinq études antérieures sur les dépenses provinciales au Canada.

Corresponding author
Department of Political Science, University of Utah, 260 S. Central Campus Drive, Orson Spencer Hall Room 252, Salt Lake City, UT 84112. Email:
Department of Political Science, Loyola University Chicago, 1032 West Sheridan Road, Coffey Hall 315, Chicago, IL 60660. Email:
Hide All
Abizadeh, Sohrab and Gray, John A.. 1992. “Politics and Provincial Government Spending in Canada.” Canadian Public Administration, 35 (4): 519–33.
Alt, James E. and Lowry, Robert. 1994. “Divided Government, Fiscal Institutions, and Budget Deficits: Evidence from the States.” American Political Science Review 88: 811–28.
Alesina, Alberto. 1989. “Politics and Business Cycles in Industrial Democracies.” Economic Policy 8: 5498.
Alesina, Alberto, Cohen, Gerald D. and Roubini, Nouriel. 1993. “Electoral Business Cycles in Industrial Democracies.” European Journal of Political Economy 9: 123.
Arellano, Manuel and Bond, Stephen. 1991. “Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations.” Review of Economic Studies 58 (2): 277–97.
Blais, André, Kim, Jiyoon and Foucault, Martial. 2010. “Public Spending, Public Deficits and Government Coalitions.” Political Studies 58: 829–46.
Blais, André and Nadeau, Richard. 1992. “The Electoral Budget Cycle.” Public Choice 74 (4): 389403.
Blejer, Mario I. and Cheasty, Adrienne. 1991. “The Measurement of Fiscal Deficits: Analytical and Methodological Issues.” Journal of Economic Literature 29 (4): 1644–78.
Bodet, Marc André. 2013. “Representation at the Margins: The Impact of Governing Parties on Spending in Canada.” Party Politics 19 (4): 665–82.
Boix, Carles. 1997. “Political Parties and the Supply Side of the Economy: The Provision of Physical and Human Capital in Advanced Economies, 1960–90.” American Journal of Political Science 41 (3): 814–45.
Borrelli, Stephen A. and Royed, Terry J.. 1995. “Government ‘Strength’ and Budget Deficits in Advanced Democracies.” European Journal of Political Research 28: 225–60.
Bräuninger, Thomas. 2005. “A Partisan Model of Government Expenditure.” Public Choice 125 (3/4): 409–29.
Carlsen, Fredrik. 1997. “Counterfiscal Policies and Partisan Politics: Evidence from Industrialized Countries.” Applied Economics 29: 145–51.
Cameron, David R. 1985. “Does Government Cause Inflation? Taxes, Spending, and Deficits.” In The Politics of Inflation and Economic Stagnation, ed. Lindberg, Leon N. and Maier, Charles S.. Washington DC: Brookings Institution.
Castles, Francis G. and Mair, Peter. 1984. “Left-Right Political Scales: Some ‘Expert’ Judgments.” European Journal of Political Research 12: 7388.
Clemens, Jeffrey and Miran, Stephen. 2012. “Fiscal Policy Multipliers on Subnational Government Spending.” American Economic Journal: Economic Policy 4 (2): 4668.
Cox, Gary W. and McCubbins, Mathew D.. 1991. “Divided Control of Fiscal Policy.” In The Politics of Divided Government, ed. Cox, Gary W. and Kernell, Samuel. Boulder CO: Westview Press.
Cowart, Andrew T. 1978. “The Economic Policies of European Governments, Part II: Fiscal Policy.” British Journal of Political Science 8: 425–39.
Cusack, Thomas R. 1999. “Partisan Politics and Fiscal Policy. Comparative Political Studies 32: 464–86.
De Haan, Jakob and Sturm, Jan-Egbert. 1997. “Political and Economic Determinants of OECD Budget Deficits and Government Expenditures: A Reinvestigation.” European Journal of Political Economy 13: 739–50.
De Hann, Jakob and Sturm, Jan-Egbert. 1994. “Political and Institutional Determinants of Fiscal Policy in the European Community.” Public Choice 80: 157–72.
Dye, Thomas. 1966. Politics, Economics, and the Public. Chicago: Rand McNally.
Edin, Per-Anders and Ohlsson, Henry. 1991. “Political Determinants of Budget Deficits: Coalition Effects versus Minority Effects.” European Economic Review 35: 15971603.
Frey, Bruno and Schneider, Friedrich. 1979. “An Econometric Model with an Endogenous Government Sector.” Public Choice 34: 2545.
Frey, Bruno and Schneider, Friedrich. 1978a. “A Political-Economic Model of the United Kingdom.” Economic Journal 88: 243–54.
Frey, Bruno and Schneider, Friedrich. 1978b. “An Empirical Study of Politico-Economic Interaction in the United States.” The Review of Economics and Statistics 60: 174–83.
Garand, James C. 1988. “Explaining Government Growth in the U.S. States.” American Political Science Review 82: 837–49.
Garrett, Geoffrey. 1998. Partisan Politics in the Global Economy. Cambridge: Cambridge University Press.
Garrett, Geoffrey. 1996. “Capital Mobility, Trade, and the Domestic Politics of Economic Policy.” In Internationalization and Domestic Politics, ed. Keohane, Robert O. and Milner, Helen V.. Cambridge: Cambridge University Press.
Garrett, Geoffrey and Lange, Peter. 1991. “Political Responses to Interdependence: What's‘Left’ for the Left?International Organization 45: 539–69.
Geist, Michael A. 1997–1998. “Balanced Budget Legislation: An Assessment of the Recent Canadian Experience.” Ottawa Law Review 29: 138.
Grilli, Vittorio, Masciandaro, Donato, Tabellini, Guido, Malinvaud, Edmond and Pagano, Marco. 1991. “Political and Monetary Institutions and Public Financial Policies in the Industrial Countries.” Economic Policy 6 (13): 341–92.
Hahm, Sung Deuk, Kamlet, Mark S. and Mowery, David C.. 1995. “Influences on Deficit Spending in Industrialized Democracies.” Journal of Public Policy 15: 183–97.
Hahm, Sung Deuk, Kamlet, Mark S. and Mowery, David C.. 1996. “The Political Economy of Deficit Spending in Nine Industrialized Parliamentary Democracies: The Role of Fiscal Institutions.” Comparative Political Studies 29: 5277.
Huber, John and Inglehart, Ronald. 1995. “Expert Interpretations of Party Space and Party Locations in 42 Societies.” Party Politics 1: 73111.
Kneebone, Ronald D. 1994. “Deficits and Debt in Canada: Some Lessons from Recent History.” Canadian Public Policy 20 (2): 152–64.
Kneebone, Ronald D. and McKenzie, Kenneth. 1999. Past (In)Discretions: Canadian Federal and Provincial Fiscal Policy.” Toronto: University of Toronto Press, Centre for Public Management.
Kneebone, Ronald D. and McKenzie, Kenneth J.. 2001. “Electoral and Partisan Cycles in Fiscal Policy: An Examination of Canadian Provinces.” International Tax and Public Finance 8: 753–74.
Mahdavi, Saeid and Westerlund, Joakim. 2011. “Fiscal Stringency and Fiscal Sustainability: Panel Evidence from the American State and Local Governments.” Journal of Policy Modeling 33: 953–69.
McCubbins, Mathew D. 1991. “Government on Lay-Away: Federal Spending and Deficits Under Divided Party Control.” In The Politics of Divided Government, ed. Cox, Gary W. and Kernell, Samuel, Boulder CO: Westview Press.
Mileva, Elitza. 2007. “Using Arellano-Bond Dynamic GMM Estimators in STATA.” Paper presented at Department of Economics, Fordham University, July 9. (August 29, 2013).
Pétry, François, Imbeau, Louis M., Crête, Jean and Clavet, Michel. 1999. “Electoral and Partisan Cycles in the Canadian Provinces.” Canadian Journal of Political Science 32 (2): 273–92.
Philipps, Lisa C. 1997. “The Rise of Balanced Budget Laws in Canada: Legislating Fiscal (Ir)responsibility.” Osgoode Hall Law Journal 34: 681740.
Pommerehne, Werner W. 1978. “Institutional Approaches to Public Expenditure: Empirical Evidence from Swiss Municipalities.” Journal of Public Economics 9: 255–80.
Poterba, James. 1996. “Budget Institutions and Fiscal Policy in the U.S. States.” American Economic Review 86: 395400.
Poterba, James. 1995. “Balanced Budget Rules and Fiscal Policy: Evidence from the States.” National Tax Journal 48 (3): 329–36.
Rodden, Jonathan and Wibbels, Erik. 2010. “Fiscal Decentralization and the Business Cycle: An Empirical Study of Eight Federations.” Economics & Politics 22 (1): 3767.
Roodman, David 2009. “How to do xtabond2: An Introduction to difference and system GMM in Stata.” The Stata Journal 9 (1): 86136.
Roubini, Nouriel and Sachs, Jeffrey D., 1989. “Political and Economic Determinants of Budget Deficits in the Industrialized Democracies,” European Economic Review 33: 903–38.
Roubini, Nouriel, Sachs, Jeffrey D., Honkapohja, Seppo and Cohen, Daniel. 1989. “Government Spending and Budget Deficits in the Industrial Democracies,Economic Policy 8: 100–32.
Sakamoto, Takayuki. 2001. “Effects of Government Characteristics on Fiscal Deficits in 18 OECD Countries, 1961–1994.” Comparative Political Studies 34: 527–54.
Saunders, Peter and Klau, Friedrich. 1985. “The Role of the Public Sector: Causes and Consequences of the Growth of Government.” OEDC Economic Studies 4.
Simpson, Wayne and Wesley, Jared J.. 2012. “Effective Tool or Effectively Hollow? Balanced Budget Legislation in Western Canada.” Canadian Public Policy 38: 291313.
Sørensen, Bent E., Wu, Lisa and Yosha, Oved. 2001. “Output Fluctuations and Fiscal Policy: U.S. State and Local Governments 1978–1994.” European Economic Review 45: 12711310.
Tapp, Stephen. 2013. “The Use and Effectiveness of Fiscal Rules in Canadian Provinces.” Canadian Public Policy 39 (1): 4570.
Tavares, José. 2004. “Does Right or Left Matter? Cabinets, Credibility and Fiscal Adjustments.” Journal of Public Economics 88: 2447–68.
Tellier, Geneviève. 2006. “Public Expenditures in Canadian Provinces: An Empirical Study of Politico-Economic Interactions.” Public Choice 126 (3/4): 367–85.
Wildavsky, Aaron. 1964. The Politics of the Budgetary Process. Boston MA: Little, Brown.
Windmeijer, Frank. 2005. “A Finite Sample Correction for the Variance of Linear Efficient Two-Step GMM Estimators.” Journal of Econometrics 126: 2551.
Recommend this journal

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

Canadian Journal of Political Science/Revue canadienne de science politique
  • ISSN: 0008-4239
  • EISSN: 1744-9324
  • URL: /core/journals/canadian-journal-of-political-science-revue-canadienne-de-science-politique
Please enter your name
Please enter a valid email address
Who would you like to send this to? *


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