Dissolution Power and Redistribution

Canonical theories of the economic consequences of executive-legislative institutions in comparative politics have ignored the role of dissolution power. In this paper, I analyze a model to highlight how the chief executive's power to dissolve the legislature, which exists in many but not all parliamentary democracies, influences partisan conflict over income redistribution. The model implies that differences in dissolution power lead to variation in the growth and retrenchment of taxes and spending across democratic constitutions. Given some electoral uncertainty, dissolution power improves the bargaining position of chief executives that want to change the status quo. The resulting differences in policy across systems with and without dissolution power can emerge despite holding constant the number and ideology of political parties. They are also not driven by the vote of confidence procedure, which is the institutional feature emphasized by existing models. I test observable implications of the model using panel data.