Agenda Control, Intraparty Conflict, and Government Spending in Asia: Evidence from South Korea and Taiwan

Abstract

In nations where the executive has budgetary control, how are spending decisions and allocations affected? Is intraparty conflict relevant? This article sets out to show that institutional rules and leadership roles affect budgetary outcomes. It makes the following argument: if intraparty conflict exists in a one-party dominant or majority-party system, the executive reduces spending to punish the party in the legislature; if no intraparty conflict exists, then the executive increases spending to reward or cultivate loyalty to himself as the party leader. If intraparty conflict exists in a minority government or majority-coalition within a competitive multiparty system, the executive increases spending to reward or cultivate loyalty to himself as the party or coalition leader. Evidence from South Korea and Taiwan between the 1970s and 2000 supports the theory. This study advances scholarship in three ways. First, it shows that institutional rules that provide the executive with agenda control also lead to the strategic use of the budgetary process and outcomes to generate loyalty to the executive as leader. Second, it reveals that this strategy affects spending outcomes in election years; this is an important caveat to electoral spending manipulations. Third, the strategic use of the budget to control intraparty conflict occurred prior to and following democratization; this reveals that institutional changes need to include modifications in rules for policy transformations.