Replication data for: The political economy of over-commitment: A comparative study of democratic management of the Keynesian welfare state, 1996

The dissertation addresses the growth of government commitments to the provision of social insurance, the provision of "public" goods, and the political management of the macroeconomy. It does so in three parts: (a) a study of the determinants and consequences of transfers growth, (b) a study of the determinants and consequences of public-debt growth, and (c) a study of the interactions of monetary-policy institutions with wage-/price-bargaining institutions and the sectoral composition of employment. Highlighting and summarizing some key arguments and findings: (a) The first study argues that demand for transfers would increase with income inequality, as has previously been noted, but only to the degree that the poor participate in the democracy (e.g., vote). The findings from a test of this and other propositions emerging from the literature include that transfer tends to grow more quickly where both the distribution of income is more unequal and the percentage of the population voting is high. The chapter then proceeds to evaluate the economic and political consequences for the functioning of the Keynesian Welfare State (KWS). (b) The second study presents a series of tests of the theoretical literature on the rise of public debt in developed democracies since the oil crises, in many cases representing the first empirical analysis of these propositions. Many of the arguments considered receive broad support from the available data, but the tests also reveal significant weaknesses and suggest some corrections. Again, the chapter proceeds to evaluate the consequences of these trends in debt for the KWS. (c) The third study derives a model showing that the real economic effects of central bank independence are not, in general, zero, as had been argued, but rather depend on the institutional structure of wage-/price-bargaining and the sectoral composition of employment: traded, private non-traded, and public. The findings indicate that central bank independence is less costly where bargaining is more coordinated and conversely that coordination is more beneficial where the bank is more independent. They also indicate that central bank independence is more (less) costly where the public (traded) sector is large. Again, the political ramifications of these arguments and findings are considered.