Fiscal Policy and Legislature - Essay Example

The author looks at various papers that connect fiscal policy to the manner of spending and the way the policymakers make decisions that lure the public away from the truth (Gilligan 58). Using papers such as Gilligan and Matsusaka (1999), Federal documents, and more others. the author brings out the bias that exists in the outcomes of the policy, following the influence of the legislature.

Above the primary focus of the paper stated, Gilligan (59) looks into the influence of political parties on fiscal policy. In this particular focus, the author seeks to address and answer questions such as the influence of partisan governments on the level of spending, and how a divided government affects the manner of spending. In response to these issues, the author notes the little effect that the partisan government has on the spending policy. The partisan, however, influences the level of spending. In coming to these conclusions, the author applies regressions and dummy variables where he finds experiments on the parties that control the legislature and how such controls were, whether in unison or divisions. The author also regressions that use expenditure that is disaggregated.

After focusing on the issues highlighted, Gilligan (60) gives a literature review on the size of the legislature in detail. In this section, The author also summarizes various data such as fiscal and demographic information. in the results section of this article, the author provides some regressions that have the fiscal variables being dependent and controlled by the legislature size. Gilligan (71) produces more results that seek to establish the influence of political parties. In later parts of the article, the author further establishes through more regressions, the basic causes of the size of the legislature through the disaggregated expenditures method.

In conclusion, the author establishes and reports a positive effect that he terms as significant (79) by the legislature on the manner of state spending. According to the findings of the author, there is a great influence on spending by the size of the house, throughout the century, in both halves. The author asserts that fiscal policy is only and majorly influenced by the upper house. This assertion goes against the 1/n predictive law that would have expected greater influence from the lower house that has more seats. with other focus on the effects of political parties and the reason why size affects influence, the paper can be said to comprehensively address the issue as noted. Read More