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Constitutions and budgeting: why don’t we observe more pre-commitment?

A popular academic theory of constitutions holds that constitutions serve to commit the polity across time. Knowing that we are likely to try to impose majority will on minorities in the future, we tie our collective hands to limit the damage that can be done to individual and community rights. Knowing that we are likely to prefer to continuously re-elect incumbents, we impose term limits that force us to choose new candidates, limiting democratic choice. There are many other examples in the literature, which is associated with scholars like Cass Sunstein and Stephen Holmes.

From this point of view, it is somewhat odd that constitutions do not more frequently limit the size or growth of government in budgetary terms. It might make sense, for example, to pre-commit not to engage in deficit spending over a certain percentage. To be sure there are lots of examples of constitutional provisions that set aside a certain percentage of the revenue for particular allocations, and some examples of restrictions on extra-budgetary spending (Austria’s Art. 51b limits it to 1/1000 of total spending, unless there is a state of defense; other constitutions prohibit extra-budgetary spending entirely.) But I know of no constitution that imposes an explicit limit on the size of the state. Relatively few national constitutions require a balanced budget, even as an aspiration. Switzerland provides one example: Art. 126 makes reference to a balanced budget over the long term and states that “The maximum of the total expenditures which may be budgeted shall be determined by the expected receipts, taking into account the economic situation.” Article 128 actually spells out the maximum personal income tax rates, so presumably when one combines limited taxes and a sort-of balanced budget requirement, there are fairly rigid limits on state spending. But the whole Swiss constitution can be amended through referendum so the level of pre-commitment is not that high.

The main point is that, while constitutions sometimes involve precommitments, they do not always do so in areas we might think they should. And many provisions of constitutions don’t seem well explained by precommitment theory: why do so many spend so much time on issues like the national anthem and oaths of office that could easily be dealt with in statutes?


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Published on April 10, 2010
Author:          Filed under: budget, hp, Tom Ginsburg

5 Responses

  1. J.S.

    “I know of no constitution that imposes an explicit limit on the size of the state.”

    I gather you mean national constitutions here, but there is at least one example of this at the subnational level. According to Wikipedia the Constitution of Colorado “requires that increases in overall tax revenue be tied to inflation and population increases unless larger increases are approved by referendum”.

    This is called the “Taxpayers Bill of Rights”. That seems to be a misnomer to me as if you look at the relevant section it isn’t formulated as a charter or list of rights.


  2. Well conservatives have long argued that our Constitution embodies such a pre-commitment strategy by providing the federal government with enumerated powers. They lost that battle in the 30s. The struggle over the scope of the commerce clause in the US suggests one reason why constitution makers are unlikely to put such limits in a constitution. It is hard to imagine a polity that could reach any agreement on what the proper level of spending is ex ante and so this is left to the political processes to work out.

  3. Just guessing, but here’s a hypothesis. If I’m writing a constitution, I probably have a good shot at holding office in the new government, right? And if so, do I want to prevent myself from building a political coalition by spending on my supporters once I’m in office?

  4. “why do so many spend so much time on issues like the national anthem and oaths of office that could easily be dealt with in statutes?”

    Constitutions are both structure and identity. We precommit to the process but we also precommit in some way – by constitutionalizing these things – to the identity, and this is not just limited to national anthems but also what should be included in the flag for instance or the official name of the country, etc.

  5. Jens

    Germany has a budget provision as well:

    “(2) Einnahmen und Ausgaben sind grundsätzlich ohne Einnahmen aus Krediten auszugleichen. Diesem Grundsatz ist entsprochen, wenn die Einnahmen aus Krediten 0,35 vom Hundert im Verhältnis zum nominalen Bruttoinlandsprodukt nicht überschreiten. Zusätzlich sind bei einer von der Normallage abweichenden konjunkturellen Entwicklung die Auswirkungen auf den Haushalt im Auf- und Abschwung symmetrisch zu berücksichtigen. Abweichungen der tatsächlichen Kreditaufnahme von der nach den Sätzen 1 bis 3 zulässigen Kreditobergrenze werden auf einem Kontrollkonto erfasst; Belastungen, die den Schwellenwert von 1,5 vom Hundert im Verhältnis zum nominalen Bruttoinlandsprodukt überschreiten, sind konjunkturgerecht zurückzuführen. Näheres, insbesondere die Bereinigung der Einnahmen und Ausgaben um finanzielle Transaktionen und das Verfahren zur Berechnung der Obergrenze der jährlichen Nettokreditaufnahme unter Berücksichtigung der konjunkturellen Entwicklung auf der Grundlage eines Konjunkturbereinigungsverfahrens sowie die Kontrolle und den Ausgleich von Abweichungen der tatsächlichen Kreditaufnahme von der Regelgrenze, regelt ein Bundesgesetz. Im Falle von Naturkatastrophen oder außergewöhnlichen Notsituationen, die sich der Kontrolle des Staates entziehen und die staatliche Finanzlage erheblich beeinträchtigen, können diese Kreditobergrenzen auf Grund eines Beschlusses der Mehrheit der Mitglieder des Bundestages überschritten werden. Der Beschluss ist mit einem Tilgungsplan zu verbinden. Die Rückführung der nach Satz 6 aufgenommenen Kredite hat binnen eines angemessenen Zeitraumes zu erfolgen.”

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