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Abstract: There is a well-established literature analyzing the effects of fiscal institutions on fiscal policy variables such as budget deficits or accumulated government debt. We combine this literature with the emerging field of positive constitutional economics, which deals with the economic effects of constitutional rules. The paper addresses three questions: (1) Do budget provisions that are explicitly spelled out in a country''s constitution have any significant effect on fiscal policy? (2) Does the transparency, or lack thereof, of the budget process have any significant effect on fiscal policy? and (3) Do these two variables have an impact on other variables such as government effectiveness and productivity? We find that constitutionally entrenched spending limits are correlated with lower total government expenditure and that the transparency of a nation''s budget is correlated with higher government effectiveness as well as lower corruption. If anything, the deficit limits entrenched in the Maastricht Treaty are correlated with higher, rather than lower, overall government expenditure. [Copyright &y& Elsevier]

Most German states amended their local constitutions during the 1990s and now allow for the direct election of mayors, initiatives and referendums, and vote aggregation, as well as vote splitting. In this paper, it is asked whether these reforms had any effects on local fiscal policies. It is shown that the direct election of mayors led to lower government spending, whereas the introduction of direct democratic elements led to higher expenditures. The empirical results concerning direct democracy are substantially different from findings in relation to both Switzerland and the US. It is argued that this difference may be due to a lack of fiscal referendums in Germany. [ABSTRACT FROM PUBLISHER]

Abstract: This is the first study that assesses the economic effects of differences in organizational design of supreme audit institutions (SAIs) on a cross-country basis. The effects on three groups of economic variables are estimated, namely on (1) fiscal policy, on (2) government effectiveness and corruption, and on (3) productivity. On the basis of up to 40 countries, differences in the independence, the mandate, the implementation record, and the organizational model of the SAIs do not seem to have any clear-cut effect on any of the three groups of dependent variables. There is only one exception: perceived levels of corruption are significantly higher if the SAI is structured along the court model of auditing. [Copyright &y& Elsevier]

Social capital is often defined as consisting of trust and postmaterialist values on the one hand, and social networks on the other hand. This article examines how different governance modes such as networks, markets, and hierarchies are related to trust and postmaterialist values in 74 West German regions. A principle component analysis of 40 social capital indicators shows that trust and postmaterialist values do not solely combine with networks but also with preferences for markets and hierarchies. A cluster analysis identifies two dominant types of regional social capital in West German regions. These types are different from the well-known Italian patterns described by Robert Putnam in his seminal work. In the period 1995-2002, the annual economic growth in regions which have combined trust with preferences for strong markets and weak political networks was on average I percent higher than in regions with inverted preferences. [ABSTRACT FROM AUTHOR]

There are three positions concerning the economic effects of human rights discussed among economists. Some economists argue that only property rights matter for economic growth and basic human rights can even make the legal system less efficient. Others argue that negative rights are generally welfare increasing while positive rights tend to reduce income and growth over time. Yet a third group of economists argues that elements of all groups of human rights are a precondition for making productive use of one's resources and are thus efficiency-enhancing. Based on a cross-country analysis, the effects of different groups of human rights on economic growth are estimated in this paper. The transmission channels through which the different rights affect growth are identified by estimating their effects on investment and overall productivity. Basic human rights have indeed a positive effect on investment, but do not seem to contribute to productivity. Social rights, in turn, are not conducive to investment in physical capital but do contribute to productivity improvements. None of the four groups of rights covered in this analysis ever has a significant negative effect on any of the economic variables included. [ABSTRACT FROM AUTHOR]