“The Policy Impact of Canadian Party Programs: Public Expenditure Growth and Contagion From the...

Canadian Public Policy

The Policy Impact of Canadian Party Programs: Public Expenditure Growth and Contagionfrom the LeftAuthor(s): Francois PetrySource: Canadian Public Policy / Analyse de Politiques, Vol. 14, No. 4 (Dec., 1988), pp. 376-389Published by: University of Toronto Press on behalf of Canadian Public PolicyStable URL: http://www.jstor.org/stable/3550410 .

Accessed: 03/06/2014 11:39

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .http://www.jstor.org/page/info/about/policies/terms.jsp

.JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range ofcontent in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new formsof scholarship. For more information about JSTOR, please contact [email protected].

.

University of Toronto Press and Canadian Public Policy are collaborating with JSTOR to digitize, preserveand extend access to Canadian Public Policy / Analyse de Politiques.

http://www.jstor.org

This content downloaded from 132.203.227.62 on Tue, 3 Jun 2014 11:39:18 AMAll use subject to JSTOR Terms and Conditions

http://www.jstor.org/action/showPublisher?publisherCode=utp

http://www.jstor.org/action/showPublisher?publisherCode=cpp

http://www.jstor.org/stable/3550410?origin=JSTOR-pdf

http://www.jstor.org/page/info/about/policies/terms.jsp


The Policy Impact of Canadian

Party Programs: Public

Expenditure Growth and Contagion from the Left* FRANCOIS PETRY Department of Public Policy University of Manitoba

Une analyse de regression en series chronologiques est utilisee pour verifier l'existence depuis 1946 d'un lien entre la croissance des depenses publiques du gouvernement canadien et les changements dans l'emphase mis sur leurs engagements par les partis politiques. Bien que la composition des depenses f6derales n'ait pas ete sensible aux themes mis de l'avant par les liberaux et conservateurs, les promesses electorales du NPD permettent de bien predire les depenses dans les categories en forte croissance. Ces resultats mettent en doute des resultats empiriques indiquant que les partis au pouvoir tiennent leurs promesses.

Time series regression analysis is used to test the existence of a relationship between the growth pattern of federal public expenditures with changes in party pledge emphases in twenty one spending categories in postwar Canada. While federal expenditure allocation has not been sensitive to the thematic emphases of ruling and major opposition party programs, the electoral promises of the CCF-NDP are a good predictor of expenditure priorities in high growth spending categories. These findings call into question the significance of earlier empirical results supporting the notion that ruling parties are reliable.

I Introduction

ormal models of electoral competition (Downs, 1957, Breton, 1974) rest on the

notion that in order for the voters to be able to affect the course of policy through the electoral process, they must be presented with broad, distinct policy alternatives. The democratic concern in these models is echoed by comparative policy analysts' preoccupation with the impact of political parties on public policy. One of the peren- nial challenges addressed by policy analysts is to assess whether political parties matter (Tufte, 1978 provides a survey of the debate; see also Rose, 1980 and Castles, 1982).

One particularly popular method to test

this has been to use longitudinal correlation between public policy outputs (typically public expenditure variables) and party control of office (Hibbs, 1977, Cameron, 1978). Thus the party control hypothesis holds that a shift in partisan control of office to the left should correlate with in- creased public spendings for education, welfare, income maintenance programs and the like, while a conservative party vic- tory should lead to a decline in public spendings for those items.

The party control hypothesis, while it is adaptable to powerful statistical techni- ques with relative economy of means, nevertheless suffers limitations. In the first instance, optimal testing conditions re- quire that parties alternate in power at

Canadian Public Policy - Analyse de Politiques, XIV:4:376-389 1988 Printed in Canada/Imprim6 au Canada



more or less regular intervals. Consequent- ly, the party control methodology cannot be conveniently exported to systems in which majorities do not usually alternate in power (coalition governments; dominant majority governments such as in postwar Canada). Another difficulty with the party control hypothesis is that it is too blunt to capture changes in policy intentions over time across as well as within parties. Nearly all the existing research on party control measures differences in party aspirations and policies in terms of a static left-right dichotomy. Yet if we accept as plausible the postulate that the priorities and policies of the left differ from those of the right, shouldn't we just as well accept as plausible the notion that aspirations and policies may differ over time within the same party?

This paper introduces an alternative method for testing the notion that parties matter by seeking to assess how the chang- ing aspirations of Canadian parties - as reflected in their programs - have been matched by shifts in public spending priorities over the postwar years. The methodology is inspired by Downs' (1957: chap. 7) reliability hypothesis which predicts that parties formulate their policy aspirations on the basis of distinct ideologies, thereby offering a clear choice of alternative policies to the voters. The hypothesis also implies that the parties have the willingness and power to enact these aspirations into public policy once they are elected into office. Briefly put, party performance in office should match party intentions. These predictions are confirmed by Pomper (1968) and Krukones (1984) who concur in finding equally high proportions of ruling party (or elected president) promises being redeemed in the form of legislation enacted by Congress1 Pomper also finds that the party in power does make a difference since its pledges come to pass more frequently than those of the out-of-power party.

While innovative, these tests do not deal with the end product of the legislative process (i.e., public spending) and, there-

fore, fail to assess the performance aspect of the reliability hypothesis. Nor are they well adapted to a systematic analysis of the links between general patterns of partisan ideologies and broad policy developments over time. This paper is a preliminary at- tempt at establishing some of those links with the use of time series regression tech- niques. The objective is to assess whether the predictive power of the reliability hypothesis is vindicated when measuring party intentions against government expenditures rather than legislative actions.

II Data Sources

The pledge content of the national platforms of the three major parties for the postwar era was analysed using various sets of measures (see the list of party program sources in the appendix). In this analysis a pledge was defined as a 'concrete' undertaking to take action in a particular field. Each pledge constituted a unique case and was coded as such for the program in which it was found. Pledges were first iden- tified and listed in order of their appearance in party programs with their content sum- marized in telegraphic form. Each pledge was coded in terms of one of 21 spending areas and one of 12 public expenditure in- struments. Expenditure instrument categories were designed to allow positive or negative scoring depending on whether an increase or a decrease in instrument use was advocated in a particular pledge. Pledges advocating expenditure increase (or creation) within a given spending area were scored as 'favourable' to that area, while pledges advocating a decrease (or elimination) in expenditure within a spending area were scored as 'unfavourable' to that area. Balance scores of favourable minus unfavourable pledges within each spending area were then computed for each party program. To allow comparison between documents which vary greatly in length, absolute scores were converted into frequency percentages.

A total of 1,208 party program pledges

The Policy Impact of Canadian Party Programs 377



were coded by paid assistants. Three hundred non-expenditure pledges were further eliminated. This analysis, therefore, deals with some 900 party program pledges which were deemed to have some impact on public expenditures. A sample of nearly half the program pledges were recoded by the author with a resulting overall agree- ment level of 90 per cent. The original coding was used throughout.

The classification of spending areas cor- responds to the classification of functional public expenditure categories used by Statistics Canada's System of Government Financial Management Statistics. In- evitably in the course of the System's history, the number, names and nature of the programs and agencies associated with each spending category have undergone changes as government operations have evolved and the system has become more sophisticated. Successive revisions have not affected materially the continuity of the statistical series, however. The Statistics Canada series starts in fiscal 1952. The expenditure data for fiscal years 1950 and 1951 were compiled from the Main Es- timates and added to the Statistics Canada series to allow the inclusion of one additional independent variable observation (i.e., the 1949 election party program pledges). Expenditure data were originally recorded as current dollar outlays, and then converted into percentages of GNP.

III Hypotheses

Even if the ruling party has the incentive to enact its electoral promises, several considerations may limit the power of policy makers to translate their intentions into expansion or reduction of financial con- tributions to particular spending areas. This section spells out some of these considerations and derives specific hypotheses thereupon.

Size and Growth% of Spending Areas It is a well-known finding of the incremen- tal budgeting literature that budgetary

choices are really only choices at the mar- gin (Wildavsky, 1975). Any new spending priority must compete with a list of established programs resulting from past com- mitments. Furthermore, the federal government often shares its spending com- petence with other levels of government. The overall range of latitude open to Cana- dian policy-makers in their choice of expenditure allocation is fairly limited (Doern, 1971; Bird, 1979). But even within these limits, some spending areas are bound to be more flexible, and hence more sensitive to party pledges, than others.

Government flexibility in a particular spending area should vary inversely with the size of that spending area: the larger the size, the less flexibility. This prediction rests on the assumption that larger spending areas - which are often associated with large government programs or agencies2 - have a built-in bureaucratic momentum which insulates their annual budgets relative to smaller spending areas or programs so that successive governments will have less control over them. Expenditure sensitivity to party pledges is, therefore, expected to vary inversely with the size of the spending categories.3

The capability of policy-makers to translate promises into action could also be affected by the rate of growth of a spending area. A pledge to increase expenditures in a given spending category should translate into a readjustment upward in the expenditure trend for that category. However, in a world of many programs competing for scarce budget resources, there is an in- evitable bias against growth in the expenditure trends of large spending areas because of the high opportunity cost in- volved in readjusting these trends upward. By contrast, upward expenditure shifts in small spending categories can be produced at relatively small cost. Small size spending categories are not only more flexible, they also grow faster than large ones.

This is clearly apparent from the distribution of the spending areas by size and growth% in Table 1. Out of 10 rapidly grow-

378 Francois Petry



Table 1 Relationship between size and growth% of spending areas

Low growth/large size High growth/large size

growth size growth size SOCIAL SECURITY 139% 11.3% HEALTH 996% 5.2% GOVERNMENT DEBT 105% 10.8% MANPOWER 1174% 5.7% GOVERNMENT 68% 4.9% COMMUNICATIONS 59% 4.5% TRANSFERS 12% 7.2% FOREIGN AFFAIRS -47% 4.5% DEFENCE -64% 17.9% FAMILIES -64% 5.7% VETERANS -67% 3.6%

Low growth/small size High growth/small size

growth size growth size TECHNOLOGY 110% 1.2% HOUSING 9740% 0.5% AGRICULTURE -22% 3.2% SOCIAL WELFARE 5219% 2.7%

EDUCATION 1308% 2.8% NATURAL RESOURCES 695% 2.8% INDUSTRY + TRADE 365% 1.1% CULTURE + RECREATION 337% 0.7% PUBLIC CORPORATIONS 240% 1.8% CIVIL PROTECTION 215% 1.7%

Note: growth higher than median (SOCIAL SECURITY) defined as high. Size smaller than median (VETERANS) defined as small.

ing spending areas (growth% > median), only HEALTH and MANPOWER are larger than the median, while only two smaller-than-median categories (TECH- NOLOGY and AGRICULTURE) are low growth. The growth distribution of spending areas appears to result in part from their respective size. Both measures combined should positively influence the sensitivity of expenditures to pledges.

There is another reason why expenditures in high growth spending areas could be more sensitive to party pledges. Studies of the relationship between party competition and public policy have often pointed to the interaction of frequent elections and high levels of interparty competition in promoting government insecurity. That insecurity encourages expanded budgets in redistributive policy areas (e.g., social welfare) has also been well established empiri- cally (Cnudde and McCrone, 1969; Fry and Winters, 1970). It seems reasonable to assume that in elections under conditions of

insecurity, the party in office will seek to take credit for past achievement in, and pledge to increase further the scope of such redistributive programs. In short, insecurity implies reliability but only in high growth spending areas. These considerations suggest a revised version of the reliability hypothesis whereby:

(1) the higher the growth rate (in ratio to GNP) of a spending area, the more sensitive public expenditure priorities will be to ruling party promise emphases in that spending area.

Contagion from the Left Governments may also respond to insecurity by seeking to enact the program of the opposition as a means of alleviating per- ceived threats to their own survival. Expen- ditures are not only sensitive to the promises of the government party, they may also be sensitive by contagion to the campaign promises of the opposition.4 Con- tagion will be taken into account in this




Table 2 Trends in party agendas (r with time)

Spending areas Govern. party Oppos. party CCF-NDP

OPPOS. PARTY deviates most from GOVERN. PARTY

DEFENCE -0.297 0.436 -0.375 CIVIL PROTECTION 0.398 -0.683 0.205 INDUSTRY AND TRADE -0.842 0.696 -0.489 NATURAL RESOURCES 0.824 0.002 0.785 AGRICULTURE 0.112 0.600 0.355 VETERANS -0.778 0.221 -0.798 FAMILIES -0.141 0.207 -0.002

CCF-NDP deviates most from GOVERN. PARTY

FOREIGN AFFAIRS -0.366 -0.267 -0.578 GOVERNMENT 0.146 -0.493 -0.598 COMMUNICATIONS -0.450 -0.168 -0.032 TECHNOLOGY 0.355 0.349 0.000 HEALTH -0.395 0.020 0.199 SOCIAL SECURITY -0.147 0.091 0.705 MANPOWER -0.211 -0.364 0.107 SOCIAL WELFARE -0.089 0.073 0.311 EDUCATION -0.227 -0.068 0.074 CULTURE AND RECREATION -0.047 -0.175 -0.354

HOUSING 0.146 0.364 0.571 TRANSFERS 0.164 -0.335 -0.700 PUBLIC CORPORATIONS -0.498 0.000 0.157

Note: The correlation coefficients for CCF-NDP and OPPOS. PARTY in the DEBT spending category are iden- tical. Only 20 spending areas are reported.

analysis by incorporating the electoral promises of the major opposition party and the CCF-NDP in the model.

Contagion can occur only if the policy agenda of the opposition is distinct from that of the ruling party. Useful insight into the nature of the political agendas of the

ruling party, major opposition and CCF- NDP can be gained from regressing the

pledge content of party programs against time. Table 2 reports the correlation coefficient estimates thus obtained for the three parties. A positive coefficient indicates a rise - while a negative coefficient indicates a decline - over time in the space devoted by a party to a particular spending area.

The top part of Table 2 lists the spending areas in which the regression coefficient estimates for the major opposition party are at maximum variance with those of the ruling party. The spending categories for

which the regression coefficients for the CCF-NDP are at maximum variance with those of the government party are grouped in the bottom part of the table. As the distribution of the entries in the Table shows, the trends in program pledges by the CCF- NDP deviate most from the trends in

program pledges by the ruling party twice as often as the trends in the program pledges of the major opposition party do. The policy distinctiveness of the CCF-NDP

suggests that this party - not the major opposition - has been the primary source of

contagion.5 The distribution of spending areas in the

Table reveals another pattern: all CCF- NDP correlation coefficient estimates associated with redistributive spending areas (HEALTH, MANPOWER, SOCIAL WEL- FARE, EDUCATION, HOUSING, SO- CIAL SECURITY) are relatively high. In

380 Francois Petry



contrast, the coefficient estimates for the ruling party (and the major opposition) in the same spending areas are generally low, often negative.6 The spending areas in which the socialist opposition outbid the ruling party are precisely those in which successive governments have expanded budgets. This suggests that insecurity has encouraged contagion (not reliability) in high growth spending areas. Hence the proposition:

(2) the higher the growth rate of a spending area, the more sensitive expenditure priorities will be to CCF-NDP promise emphases in that spending area.

IV The Model

This analysis compares the variance in two series of observations with different time intervals (electoral promises cannot be recorded annually like expenditures). To solve this difficulty, it was necessary to match the expenditure observations with the pledge observations. In this sense, the analysis is captive of the pledge data as determined by the number and frequency of elections.

The party promise hypothesis is specified by the following equation:

EXPSHARE(iJ) = a + b(l) COUNTER(O) + b(2) GOVPLEDGE(ij) + b(3) OPPLEDGE(ij) + b(4) NDPLEDGE(ij) + e(ij)

where EXPSHARE(ij) = the average ratio to GNP of expenditure in spending category i for the fiscal years at the start of which government j is presiding; COUNTER(/) = a counter coded from 1 (for the years covering the first government in power in the time series) to 9 (for the years covering the last government)7 and GOVPLEDGE (ij) = the percentage frequency of expenditure relevant electoral pledges by government partyj in spending category i.

The value and sign of the coefficient b(2) in the equation indicate, respectively, the

slope and direction of the estimated line obtained by regressing government party pledges on expenditures. By hypothesis the EXPSHARE variable (i.e., the mean value of expenditure ratio to GNP over an inter- election period) is sensitive to the associated GOVPLEDGE variable. The estimated EXPSHARE should go up as GOV- PLEDGE rises and down as GOVPLEDGE declines. This means that the sign of the coefficient estimate b(2) must be positive. Furthermore, if the value of the coefficient b(2) is significantly different from zero (at the .10 level), it can be inferred that the GOVPLEDGE variable has a non trivial impact on the slope of the time series, hence that the electoral promises of the ruling party predict government spending priorities with some degree of accuracy.

The GOVPLEDGE independent variable specifies the sensitivity of EXPSHARE to the campaign promises of the government party only. Two additional independent variables OPPLEDGE (ij) and NDPLEDGE (ij) are introduced in the equation to specify the impact by contagion of rival parties' promises on government party pledge enactment. OPPLEDGE(iJ) = the percentage frequency of expenditure relevant pledges by the major opposition party in spending category i in the election in which government party j is voted into power and NDPLEDGE(iJ) = the percentage frequency of expenditure relevant pledges by the NDP in the same election.

By hypothesis EXPSHARE is sensitive to GOVPLEDGE unless EXPSHARE becomes sensitive to OPPLEDGE or ND- PLEDGE (or both) by contagion. Contagion can only occur if the campaign promises of the opposition parties diverge from the campaign promises of the government party. Therefore, it is expected that if the coefficient b(2) is of the wrong sign (i.e., negative) then the coefficients b(3) and b(4) should be positive. One may also expect that EXPSHARE will be more sensitive to GOVPLEDGE when campaign promises of all the parties converge in the same direction. Thus the model predicts that the value




Table 3 Coefficient estimates for the impact of party promises on expenditure priorities (t values in parentheses)

Spending Areas

HOUSING

SOCIAL WELFARE

CULTURE AND RECREATION

EDUCATION**

INDUSTRY AND TRADE**

NATURAL RESOURCES**

MANPOWER

HEALTH**

PUBLIC CORPORATIONS

CIVIL PROTECTION

TECHNOLOGY**

GOVERNMENT**

COMMUNICATIONS*

SOCIAL SECURITY

DEBT**

TRANSFERS**

DEFENCE

AGRICULTURE**

FOREIGN AFFAIRS

FAMILIES

VETERANS

Intrcpt

-.00115 (-0.21) .00297* (-2.92)

-.00268 (-0.78) -.00062 (-0.37)

0.00116 (0.24)

-.00100 (-1.18) -.00492 (-0.86) -.00314* (-3.11)

-.00501 (-1.43) 0.00138 (0.64) 0.00248 (1.51) 0.00933* (3.30) 0.01268 (1.86) 0.01939* (2.41) 0.02049* (9.97) 0.01748* (5.90) 0.05746* (8.33) -.00435* (-3.37) 0.00455 (0.73) 0.01301* (5.86) 0.00331 (0.74)

Time

0.00083 (1.23) 0.00158* (11.48)

0.00080 (1.73) 0.00128* (5.40)

0.00059 (1.27)

0.00018 (0.59) 0.00218* (3.91) 0.00188* (16.17)

0.00121* (2.63) 0.00101* (3.31) 0.00020* (2.57) 0.00019 (0.68) 0.00012 (0.31) -.00035 (-0.23) -.00052 (-1.69) -.00009 (-0.23) -.00556* (-6.19) 0.00059* (8.47) .000217 (0.34) -.00061 (-1.97) 0.00041 (0.62)

Ruling Opposit party pledges

-.06665* (-2.87) -.04973* (-2.29)

0.10993 (1.32) 0.00800 (0.07)

-.08246* (-2.23)

0.04710* (2.23) 0.05260* (2.76) 0.06557* (5.37)

0.09773 (0.62) -.05142 (-0.81) 0.11376* (3.06) -.00641 (-0.22) -.03911 (-0.66) -.22374 (-0.94) 1.21389* (7.33) 0.01981 (0.52) 0.03944 (0.46) 0.04042* (3.36) -.00726 (-0.17) 0.03812 (0.65) 0.07885 (0.69)

party NDP pledges pledges

0.00339 0.05046* (0.06) (2.94) 0.04677 0.02869* (1.20) (2.15)

-.04810 0.00171 (-1.16) (0.03) 0.01195 -.01322 (0.17) (-0.39)

0.01605 0.03705* (1.74) (2.67)

-.00600 0.00722 (-0.37) (0.82) -.02370 0.01685* (-0.73) (2.98) -.04038* 0.04362* (-4.18) (4.22)

- 0.15569* (2.62)

-.02794 0.04252* (-0.87) (6.00) 0.03128- (0.66) -

0.02858* -.03327 (3.34) (-2.03) -.00961 -.03695 (0.44) (0.77) 0.12302 0.07629 (0.92) (0.93) -.61897* -.11996 (-4.47) (-0.62) -.01951 -.10918* (-0.46) (-2.30) -.03267 0.00943 (-0.33) (0.22) 0.00921* 0.04473* (3.48) (3.12) -.02151 -.00662 (-0.54) (-0.22) -.07578 0.00477 (-0.49) (0.149) -.023335 0.11719 (-0.21) (0.67)

Pledge contrib. Total to RSQ RSQ

0.292 0.917

0.049 0.912

0.036 0.624

0.169 0.660

0.210 0.769

0.172 0.878

0.139 0.925

0.242 0.839

0.387 0.717

0.003 0.799

0.053 0.144

0.371 0.700

0.467 0.504

0.004 0.891

0.672 0.794

0.788 0.805

0.036 0.936

0.113 0.149

0.233 0.690

0.010 0.839

0.004 0.971

* Significant at the .10 level. ** These equations with error terms characterized by autoregressive process of order 1.

of the coefficient b(2) is more likely to be The coefficients for the model were es- significantly different from zero (at the .10 timated initially using the ordinary least level) when all the PLEDGE coefficients square (OLS) regression technique. Yet, an are of positive sign. examination of the plots of the autocorrela-

382 Francois Petry



tion functions revealed the existence of serial correlation for some expenditure areas. In the equations where residuals from the regression indicated the presence of autoregressive processes, the initial OLS coefficients were reestimated using the generalized least squares procedure in the SAS AUTOREG program. OLS estimates were used for the remaining equations which did not exhibit autocorrelated residuals patterns.

V Findings

Table 3 shows the unstandardized regression coefficients (with associated t ratios) for the three party program pledge variables in 21 spending areas as well as the percentage of total variance (contribution to total RSQ) that is explained by the PLEDGE variables. One immediately apparent finding is the failure of the reliability hypothesis in explaining government expenditure priorities. In only nine of the 21 spending categories do we find that the pledges of the ruling party have a statistically significant impact (at the .10 level) on expenditure priorities. Moreover, four of the nine statistically significant PLEDGE coefficients associated with the ruling party are inversely related to expenditure priorities. This leaves only five spending categories in which the pledges by the ruling party have a positive and discernable impact on expenditures (TECHNOLOGY, NATURAL RESOURCES, AGRICUL- TURE, HEALTH, MANPOWER). This is too low a success ratio to rule out with cer- tainty the possibility of obtaining similar results with randomly selected dependent variable values. This clearly suggests that the hypothesis should be rejected.

The results for the 21 spending area equations in Table 3 have been rank or- dered on the basis of a combined index obtained by dividing each spending area's growth% by its average size. Thus, HOUS- ING - the spending category with the smal- lest mean ratio to GNP and the highest growth% - is at the top of the ranking while

VETERANS - a large spending area with the steepest decline overall - is at the bottom. The combined index is intended to provide a single test of the size and growth% hypothesis of section 3.

The size and growth per cent hypothesis suggests that the five spending areas which produce statistically significant coefficient estimates for the GOVPLEDGE variables should appear at the top of the Table. The empirical evidence lends no credibility to the hypothesis since none of the five top spending areas in Table 3 produce the right kind of sensitivity to ruling party promises: two of the coefficient estimates do not meet the significance test and the remaining three, while statistically significant, are of the wrong sign. The distribution of spending areas by size and growth per cent offers no clue as to why expenditures are sensitive to ruling party pledges in some areas and not in others.

Turning attention to the contagion hypothesis, we find a much better fit. Ex- penditure priorities are predicted - with some degree of statistical significance - by contagion in four spending categories. Con- tagion occurs via the CCF-NDP in three categories (HOUSING, INDUSTRY AND TRADE and SOCIAL WELFARE) and via the major opposition party only once (DEBT).8 These are the cases in which the ruling party has enacted the expenditure priorities of the opposition in contradiction with its own preferences. There is also statistical evidence that expenditure priorities are sensitive to pledge emphasis by the CCF-NDP in two additional spending categories (CIVIL PROTECTION and PUBLIC CORPORATION), and by the major opposition party in one spending category (GOVERNMENT). In these spending categories, the coefficient estimates for the impact of opposition party promises are of positive sign and statistically significant but not those of the ruling party. These are the cases in which the ruling party has enacted expenditure priorities preferred by the opposition, although we cannot say whether this was con-




trary to the ruling party's own preferences. In addition, CCF-NDP and ruling party PLEDGE coefficients are statistically significant and positive in three spending categories (HEALTH, MANPOWER and AGRICULTURE).

To sum up, out of nine statistically significant PLEDGE coefficient estimates for the C.CF-NDP, eight are of positive sign. This exceeds the number of positive and statistically significant coefficients associated with both the major opposition and ruling party. However, the most interesting finding (which confirms our contagion hypothesis rather nicely) is that no less than seven out of these eight positive coefficient estimates are found in the 10 top spending areas of Table 3.

The robustness of these findings should be emphasized. Several variations and more detailed specifications were at- tempted in the course of developing the model with relatively little change in the es- sential pattern being uncovered.9 They are nevertheless tempered by two facts. First, most of the PLEDGE variables account for a small percentage of the variance in EX- PSHARE irrespective of the equations in which they are found (the PLEDGE contribution to total RSQ is typically less than .20). Second, the absolute values of the coefficient estimates for the CCF-NDP PLEDGE variables in these equations are often lower than the values of the coefficients for the GOVPLEDGE variables.

Conclusions

The performance (or lack thereof) of party promises in predicting public expenditures could be easily justified a posteriori in any particular spending area. However, these would be essentially ad hoc explanations. Rather than analyse each spending area in isolation, the approach in this paper has been to develop a set of general hypotheses, each incorporating distinct characteristics of the policy-making environment, that generate broad rival explanatory patterns in the distribution of expenditure programs

that are responsive to party pledges. In the reliability hypothesis, expendi-

ture priorities are predicted by ruling party promises regardless of the issues in which the promises are made and of the opposition's stand on those issues. The size and growth% hypothesis simply qualifies the first hypothesis: ruling party promises best predict expenditure priorities in high growth spending areas. Neither of these hypotheses is confirmed by the empirical evidence. It is the contagion hypothesis which best fits the data. The ruling party has enacted the promises of the CCF-NDP by contagion in high growth spending areas. This selective contagion effect is ob- servable because the pledges of the CCF- NDP - but not those of the major opposition - are distinct from the pledges of the ruling party. The predictive failure of the reliability hypothesis contradicts US based results by Pomper and others. It is, therefore, appropriate to discuss and com- pare the significance of these results against ours.

The Relevance of Contagion This analysis has uncovered two reasons why the ruling party did not enact its expenditure relevant pledges: either it enacted CCF-NDP promises by contagion - and this happened typically in flexible spending areas in which the ruling party could enact its promises if it wanted - or it was prevented from enacting its (or anyone else's) promises for lack of flexibility in the remaining spending areas.

These findings underscore the impor- tance of contagion from socialist opposition in the shaping of Canadian federal expenditure priorities. Such a contagion effect does not manifest itself in earlier US studies of the relationship between ruling and opposition party promises and government actions. The reason for the lack of contagion evidence in these studies lies in the absence of policy distinctiveness in US federal party politics.l0 How significant, then, is the finding associating policy distinctiveness with contagion? It has been

384 Francois Petry



suggested that government insecurity is revealed through a 'demonstration effect' (Tarschys, 1975; Lowery and Berry, 1983) whereby voters' dissatisfaction with the status quo becomes publicized and chan- nelled into organizational mass support. In the US, manifestations of discontent with the dominant ideology have developed out- side traditional partisan politics (e.g., urban riots). By contrast, opposition forces have emerged in Canada and elsewhere to channel the demonstration effect into the party system. This raises the interesting possibility that contagion becomes observ- able whenever ideologically distinct forces are present in a party system. The policy distinctiveness condition for contagion does not even imply that the opposition force necessarily represents a leftist alternative. Contagion from the right - or centre - is a possibility as well. Interesting findings in this regard come from the German Federal Republic where, as shown by Hof- ferbert and Klingemann (1988), the destiny of federal government spending is best forecast by the promises of the Free Democrats, the minor coalition partner. Al- though it is located at the centre of the political spectrum, the German FDP distin- guishes itself from the two main parties on a range of issues, including foreign policy and defence. These authors use a methodology that is very similar to ours, which makes their conclusion all the more relevant.

Contagion also requires the existence of a threat potential. Policy analysts who have studied contagion effects in Canadian provincial politics have implicitly assumed that in order for contagion to emerge, the opposition (CCF-NDP) should actually hold power some of the time or at least have a governing potential. This has led them to discount the possibility of CCF-NDP contagion at the federal level (Cairns, 1968; Chandler, 1977). But the results presented in this paper combined with the German evidence show that the existence of a threat potential leading to contagion does not re- quire the contagious opposition to have a

governing potential. In this regard, it is worth noting that, unlike the German FDP, the federal NDP, by virtue of its location at the left end of the political spectrum, has never held a true balance of power even in the context of past Liberal minority governments. Judging by the Canadian and Ger- man evidence, it seems that government insecurity reaches deeper than previously thought: with a minimum of party system polarization, contagion may be the rule, not the exception, in the shaping of government expenditure priorities.

Norms vs. Budgets The test presented here has some limitations that must be kept in mind when inter- preting the results. One limitation lies in the fact that non-budgetary pledges (25 per cent of total) are left unaccounted for. Omitting non-budgetary pledges probably does not significantly undermine the contagion finding. The ruling party should respond to CCF-NDP threat just as readily - if not more - in non-monetary policy areas (e.g., labour relations, regulation of individual behaviour) as in money inten- sive areas. The same cannot be said with respect to the finding that ruling party promises have virtually no impact on government actions. The inclusion of non- monetary pledges in the analysis would probably alter this finding to an extent. Un- like budgetary decisions, non-monetary actions have no price tag and do not inherit the inertia of past accumulation. These actions not only display flexibility of goals, they also allow a gradual spectrum of governing instrument use (Trebilcock et al., 1981). This makes it all the more likely that ruling parties will be in a position to redeem their non-monetary pledges one way or another.

Legislative-based studies by Pomper, Krukones and others suggest that ruling parties make reliable promises and that these promises make a difference for public policy; the budgetary evidence that is presented here suggests otherwise. The above considerations should clarify this ap-




parent contradiction. Our results, while they suggest that Canadian governments have been less reliable than anticipated, may also be an effect of the relatively strenuous test that was used. Pomper and others use a measurement strategy that is lax by comparison: each pledge and sub- sequent action is considered as a non- budgetary item. Government actions not associated with pledges are simply put aside. Furthermore, they focus upon the initial stage of the policy process (i.e., the ta- bling of legislation) and conveniently ignore the potential obstacles which lie beyond that stage and may prevent ruling parties from effectively implementing their promises.

Although expenditure data are a better source of evidence on government decision priorities than legislation, one cannot say conclusively that ruling party promises do not matter for public policy. Norms (laws) and budgets are only two among many resources that can be used by governments to influence public policy. Additional resources, such as public employees, taxa- tion, regulation, must be examined to further our understanding of the link between partisan ideologies and public policy. Final- ly, this paper has been concerned primarily with what the parties want: the impact of non partisan demands on government actions has been ignored. Further research on how bureaucratic decisions may influence the way in which governments implement their intentions is certainly warranted. Another important missing link lies in the study of the relationship of party promises and government actions on issues with popular preferences on those issues. While these points await further inquiry, it is hoped that the research presented here shows the way to solving part of the puzzle.

Notes

* I am grateful to Norman Frohlich, Howard Har- matz, the anonymous referees and the editors of this journal, particularly Andre Blais, for useful comments and suggestions on a previous version of this paper, and to the University of Manitoba's

Research Grants Committee for financial support. Bill Irvine kindly provided part of the documenta- tion. I also appreciate the assistance of Bonnie Kuhn and Real Cloutier in the collection and coding of the data.

1 Similar conclusions are reached by Ginsberg (1976) and Monroe (1983) in the US and by Rose (1980) and Railings (1987) in Great Britain and Canada.

2 Although the pledge and expenditure data in this research are classified by spending areas rather than programs or agencies, there is some plausibility in the view that the size and growth of spending areas vary in proportion to the size and growth of the particular programs included in those areas. The larger a given spending area, the larger the size and number of programs in that area. We will, therefore, assume that our hypotheses - which are primarily designed to apply to programs - are also applicable to spending areas.

3 Another reason why a size-sensitivity relationship could be observed - which has nothing to do with the notion of flexibility in expenditure allocation - is that smaller spending areas tend to have smaller numbers of party program pledges associated with them. Expenditures in large spending areas are not expected to be predicted accurately by party pledges because there is a tendency, with a large pool of pledges, for erratic variations resulting more from 'noise' in the pledge data than truly relevant policy priority changes. Party pledges are expected to predict expenditures more accurately in smaller spending categories because, with a smaller pool of pledges, the tendency for erratic noise is reduced.

4 The term contagion from the opposition was coined by Duverger (1974). For further elabora- tion upon the concept in the context of Canadian provincial politics, see Chandler (1977). According to Chandler (1977:756), '[c]ontagion refers to those situations of insecurity in which opposition forces can influence governments to take policy decisions which on their own they would not or- dinarily take'.

5 That both the Liberal and Conservative parties share similar policy priorities is a well-docu- mented fact of federal politics. As argued by Chandler (1977) and Cairns (1968) their ideological similarity makes it unlikely that one of them, in its capacity as main opposition, would exercise contagion on the other.

6 These findings are largely consistent with those of a previous analysis of Canadian party platforms (Irvine, 1987). Irvine's work consists of locating Canadian party platforms in an ideological space derived through principal components analysis of a set of policy categories. While for the most part, our party program sources are the same as the ones used by Irvine, the policy categories he uses are somewhat different from the spending areas

386 Francois Petry



used in this research. It should also be kept in mind that, while Irvine compared the programs of the Liberal and the Progressive Conservative parties, the present research compares the programs of the ruling and the main opposition parties. However, since the Liberal party has been in office for most of the period of analysis, the pledge emphasis of the ruling party in the various spending categories coincides rather well with that of the Liberal party.

7 The specifications in the model amount to lag the independent variables PLEDGE one year behind the dependent variable EXPSHARE. This is to account for the delayed effect of party pledges on changes in government spending priorities. There were 12 elections (and consequently 12 PLEDGE observations) during the period of analysis. However, the governments elected in 1957, 1962 and 1979 were defeated by Parliament upon con- sideration of their first budgets and, consequently, had no discernable impact on expenditures for fiscal 1958, 1963 and 1980. The PLEDGE(1957), PLEDGE(1962) and PLEDGE(1979) observations were, therefore, eliminated. In the resulting nine- observation analysis the PLEDGE(1958), PLEDGE(1963) and PLEDGE(1980) observations were not lagged behind the corresponding EX- PSHARE variables.

8 Party pledges to reduce the public debt were coded as favorable to the DEBT spending area. The sign of the PLEDGE coefficient estimates is, therefore, expected to be negative in the DEBT spending area.

9 The following issues were specifically inves- tigated: / the possibility of a two-year lag between the independent and dependent variables; 2/ the existence of nonlinear spending functions (con- trolled by squaring the time variable); and 3/ the inclusion of a threat element in the specification of the contagion hypothesis. In addition, covariance matrices were generated to control for possible interactions between the independent variables.

10 The analyses by Rose and Railings for Britain and Canada - where policy distinctiveness is present in the party system - are not directly relevant here since these authors only investigate ruling party pledges.

References

Bird, R.M. (1979) Financing Canadian Govern- ment: A Quantitative Overview (Canadian Tax Foundation).

Breton, A. (1974) The Economic Theory of Representative Government (Chicago: Al- dine).

Cairns, A. (1968) 'The Electoral System and the Party System in Canada, 1921-1965,'

Canadian Journal of Political Science/Revue canadienne de science politique, pp.55-80.

Cameron, D. (1978) 'The Expansion of Public Economy. A Comparative Analysis,' Ameri- can Political Science Review, pp. 1243-61.

Carrigan, D.O. (1968) Canadian Party Plat- forms 1867-1968 (Toronto: Copp Clark).

Castles, F. (1982) The Impact of Parties: Politics and Policies in Democratic Capitalist States (Beverly Hills: Sage Publications).

Chandler, W.M. (1977) 'Canadian Socialism and Policy Impact: Contagion from the Left?,' Canadian Journal of Political Science/Revue canadienne de science politique, pp.755-80.

Cnudde, C.F. and D.J. McCrone (1969) 'Party Competition and Welfare Policies in the American States,' American Political Science Review, pp.858-66.

Doern, G.B. (1971) 'The Budgetary Process and the Policy Role of the Federal Bureaucracy', in Doern and Aucoin, eds., The Structure of Policy Making in Canada (Toronto: Macmil- lan).

Downs, A. (1957) An Economic Theory of Democracy (New York: Harper and Row).

Duverger, M. (1974) Political Parties (London: Methuen), 3rd ed.

Fry, B. and R. Winters (1970) 'The Politics of Redistribution,' American Political Science Review, pp.508-22.

Ginsberg, B. (1976) 'Elections and Public Policy,' American Political Science Review, pp.1467-87.

Hibbs, D. (1977) 'Political Parties and Macro- economic Policies,' American Political Science Review, pp.1467-87.

Hofferbert, R.I. and H.D. Klingemann (1988) 'The Policy Impact of Party Programs and Government Declarations in the Federal Republic of Germany,' mimeo SUNY Bing- hamton.

Irvine, W.P. (1987) 'Party Platforms and Cam- paign Strategies in Canada: 1945-1980.' In Budge et al., eds. Ideology, Strategy and Party Change: Spatial Analyses of Postwar Elec- tion Programmes in Nineteen Democracies (Cambridge: Cambridge University Press).

Krukones, M.G. (1984) Promises and Perfor- mance: Presidential Campaigns as Policy Predictor (Lanham, MD: University Press of America).

Lowery, D. and W.D. Berry (1983) 'The Growth of Government in the United States: An Em- pirical Assessment of Competing Explana- tions,' American Journal of Political Science, pp.665-94.




Monroe, A.D. (1983) 'American Party Platforms and Public Opinion,' American Journal of Political Science, pp.27-42.

Pomper, G.M. (1968) Elections in America: Con- trol and Influence in Democratic Politics (New York: Dodd, Mead and Co.).

Railings, C. (1987) 'The Influence of Election Programmes: Britain and Canada 1956- 1979.' In Budge et al., eds. Ideology, Strategy and Party Change: Spatial Analyses of Post- war Election Programmes in Nineteen Democracies (Cambridge: Cambridge University Press).

Rose, R. (1980) Do Political Parties Matter? (London: Methuen).

1984) Understanding Big Government: The Programme Approach (Beverly Hills: Sage Publications Inc.).

Tarschys, D. (1975) 'The Growth of Public Ex- penditures: Nine Modes of Explanation,' Scandinavian Political Studies, pp.9-31.

Trebilcock, M., D. Hartle, R. Pritchard and D. Dewees (1982) The Choice of Governing In- struments (Ottawa: Minister of Supply and Services).

Tufte, E.R. (1978) Political Control of the Economy (Princeton: Princeton University Press).

Wildavsky, A. (1975) Budgeting: A Comparative Theory of the Budgetary Process (Boston: Lit- tle, Brown).

Appendix: Party Program Sources

Party programs are drawn from Carrigan (1968) for the 1949 through 1968 elections and various press releases and party pamphlets for 1972 and onwards.

Liberal 1949 Resolutions adopted by the Third Nation-

al Liberal Convention, Ottawa, 1948. 1953 Campaign speeches published in The

Canadian Liberal, Autumn, 1953. 1957 Campaign speeches by the leader taken

from newspapers. 1958 New Statements of Liberal Policy,

published by the National Liberal Federa- tion.

1962 The Liberal Programme, published by the National Liberal Federation.

1963 The Policies of the Liberal Party, published by the ast onal Liberal Federation.

1965 Speakers' Notes, published by the Liberal

Party of Canada. 1968 As above. 1972 Collection of campaign leaflets published

by the Liberal Party of Canada and distributed by the Ottawa office.

1974 With You for Canada, published by the Liberal Party of Canada.

1979 A Look at the Facts, The Liberal Party of Canada, Ottawa.

1980 Collection of campaign leaflets published by the Liberal Party of Canada and distributed by the Ottawa office.

Progressive Conservative 1949 Policy statement by the leader of the

Progressive Conservative Party distributed to the press.

1953 Campaign leaflets, The Progressive Con- servative Party, Ottawa.

1957 A New National Policy, published and distributed by the Ottawa office of the Progres- sive Conservative Party.

1958 Campaign speeches by the leader of the Progressive Conservative Party taken from newspapers.

1962 As above. 1963 Campaign leaflets published by the central

office of the Progressive Conservative Party, Ottawa.

1965 Policies for People, published and distributed by the central office of the Progres- sive Conservative Party of Canada.

1968 Progressive Conservative Policy Handbook, Progressive Conservative Party of Canada, Ottawa.

1972 Campaign leaflets published and distributed by the central office of the Progres- sive Conservative Party.

1974 People and Priorities, published by the Progressive Conservative Party of Canada.

1979 The Right Choice, New leadership for Canada, published by the Progressive Con- servative Party of Canada.

1980 Campaign leaflets published and distributed by the central office of the Progres- sive Conservative Party.

CCF-NDP 1949 Security for All, published and distributed

by the national office of the CCF. 1953 Humanity First, source as above. 1957 Winnipeg Declaration of Principles of the

Cooperative Commonwealth Federation, source as above.

1958 Campaign leaflet published by the central

388 Frangois Petry



office of the CCF. 1972 New Democratic Party Program, source as 1962 The Federal Program of the New above.

Democratic Party, published by the central 1974 A Free and Generous Society, published office of the NDP. and distributed by the central office of the

1963 Campaign leaflets published by the central NDP. office of the NDP. 1979 New Democratic Ideas for Working on

1965 New Democratic Party Program, source as Canada's Future, source as above. above. 1980 A Choice for Canadians: Policies of the New

1968 New Democratic Party Program, source as Democratic Party, source as above. above.

canadian ethnic Audies .^

etudes ethniques ou canada

An interdisciplinary journal devoted to the study of ethnicity, immigration, inter-group relations and the history and cultural life of ethnic groups in Canada. Une revue interdisciplinaire consacree a I'etude de I'ethnicite, de I'immigration. des relations entre groupes, et de I'histoire et de la vie culturelle collective au Canada.

SPECIAL ISSUES AVAILABLE/NUMEROS SPECIAUX EN VENTE

1978, Vol. X, no. 2 - Ethnic Radicals 1984, Vol. XVI, no. 3 - Ethnic Art and Architecture 1985, Vol. XVII, no. 2 - The Metis: Past and Present 1986, Vol. XVIII. no. 2 - Ethnicity in Quebec* 1987, Vol. XIX, no. 3 - The Chinese Experience in Canada

RECENT REGULAR ISSUES INCLUDE/NUMEROS REGULIERS RECENTS COMPRENNENT 1986, Vol. XVIII, no. 2 - 'The Commission des ecoles catholiques de Montreal and the

Neo-Canadian Question: 1947-63 by Micahel D. Behiels

1986, Vol. XVIII, no. 3 - "Ethnogenerational Variation in Educational Achievement" by Anthony H. Richmond

1987, Vol. XIX, no. I - "Patterns of Ethnic Media Consumption: A Comparative Examination of Ethnic Groupings in Toronto" by Jerome Black and Christian Leithner

1987, Vol. XIX, no. 2 - "Government Perceptions of Ukrainian Immigrants to Westem Canada 1896-1902" by John C. Lehr

$10.00 for individual issues; *$12.00 for Ethnicity in QuebecJS10.00 pour un seul numero: *$12.00 pour Le Pluralisme au Quebec For all issues prior to 1988, enquire at the Calgary joumal address below/pour les numeros avant 1988 disponibles adressez vos demandes au bureau du journal a Calgary a I'adresse ci-dessous. Issues also include book and film reviews, opinions, immigrant memoirs, translations of primary sources, books received, an index and annual bibliography. Chaque numero comprend des recensions de livres et de films, des opinions, des memoires d'immigrants, des traductions de sources primaires, livres recus. et des bibliographies.

Subscription rates/frals d'abonnement: One year/un an

Individuals/particuliers $30.00 Students/etudiants $12.00

Institutions/institutions $36.00 Above rates include a quarterly newsletter and membership in the Canadian Ethnic Studies Association/Les frais comprennent les bulletins trimestriels et la qualite de membre de la Societe d'etudes ethniques au Canada. Articles for publication, books for review and general correspondence should be addressed to CANADIAN ETHNIC STUDIES, do The University of Calgary, 2500 Unversity Drive N.W., Calgary, Alberta T2N I N4 Canada. Single orders and back issues can be obtained from this address.

Subscriptlon orders and Inquiries should be addressed to CANADIAN ETHNIC STUDIES ASSOCIATION, Department of Sociology, Dalhousie University, Halifax, Nova Scotia B3H IT2 Canada.

Tous les articles, les recensions, et la correspondance generale doivent etre adresses aux ETUDES ETHNIQUES AU CANADA, Universite de Calgary, 2500 University Drive N.W., Calgary, Alberta T2N I N4 Canada. Tout numero courant et ancien de la revue peut etre commande a I'adresse ci-dessus.

Pour les abonnements et les informations priere de vous adresser a la SOCIETE d'ETUDES ETHNIQUES AU CANADA, Departement de sociologie, Dalhousie Universite, Halifax, Nova Scotia B3H 1T2 Canada.

^_____'_____




“The Policy Impact of Canadian Party Programs: Public Expenditure Growth and Contagion From the...

Documents

Transcript of “The Policy Impact of Canadian Party Programs: Public Expenditure Growth and Contagion From the...