A Formal Model of Distributive Politics with an Executive and a Budget Cap

comments and suggestions. In this paper, I present a distributive politics model based on Baron(1993). The model adds two real-world political institutions to a distributive politics framework: (i) a veto-wielding executive who is subject to legislative over-ride; and (ii) a legislature that can impose a budget cap on itself. I show that the legislature improves its welfare when it can impose a budget cap before it determines allocations in legislative districts. Its welfare also improves when a conservative executive is in oce. In addition, several counterintuitive propositions emerge. For instance, suppose the legislature can limit its own spending; then it actually spends more when the executive is conservative (i.e., prefers less distributive spending) as opposed to liberal. In addition, regardless of the executive's preferences, a budget cap has the eect of lower-ing spending, relative to not having a budget cap in eect. These theoretical results generate several testable predictions about spending patterns, which can be analyzed by taking advantage of the rich institutional variation in the U.S. states.