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Abstract

This paper argues that fiscal policies vary with governmental turnover and tenure in ways that have been overlooked by prior research. It posits a discrepancy between first-term and non-first-term governments: The former consider fiscal adjustments to cultivate partisan reputations, whereas the latter either maintain the status-quo balance or increase deficit spending to buoy their electoral support. The model anticipates first-term heterogeneity, interterm budget cycles, and a last-term effect, in which fiscal deterioration is greater among governments that lose reelection than among those that win another term. An analysis of term-to-term debt trajectories between 1970 and 2019 for twenty-two democracies supports the theory and veto players theory. Fiscal trajectories are most varied among first-term (post-turnover) governments; debt growth is fastest among last-term (pre-turnover) governments; multi-term governments frequently follow a restraint-to-expansion cycle; and all three patterns are more pronounced for majority governments than for coalitions or minority governments.