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Legislative Term Limits and Fiscal Policy Performance
Author(s) -
LEWIS DANIEL C.
Publication year - 2012
Publication title -
legislative studies quarterly
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.728
H-Index - 54
eISSN - 1939-9162
pISSN - 0362-9805
DOI - 10.1111/j.1939-9162.2012.00049.x
Subject(s) - legislator , bond , legislature , term (time) , revenue , fiscal policy , state (computer science) , economics , monetary economics , business , actuarial science , public economics , finance , political science , law , legislation , physics , algorithm , quantum mechanics , computer science
Do term limits impede the ability of legislators to effectively set fiscal policy? To address this question, I examine state bond ratings from 1996 to 2009. Bond ratings serve as a valuable indicator of a state's fiscal performance, gauging the risk and uncertainty that investors face when buying these bonds. In addition, bond ratings are important policy ends in themselves. High bond ratings make it easier for states to borrow and raise revenue, while lowering interest rates. Results from analyses of “Term‐Limitedness” and legislator experience suggest that term limits negatively impact a state's fiscal performance, leading to lower bond ratings.