aggregate deviations, _r_ and _e_ . Alternatively, civil service employment could be viewed as an essential input to public service delivery and, as such, something to be protected. Such spending should be well insulated from revenue shortfalls, if only because politicians want to avoid unrest and/or they know it is difficult to replace skilled workers lost to attrition over poor pay conditions. This protection would be achieved through counter-cyclical financing and the avoidance of overspending on non-wage related activities.

In this context, it is worth noting that there could be an alternative interpretation for the youth dependency ratio in the set of hypotheses H02 above. It may instead be related to capacity for PFM: very young populations tend to be less educated and therefore there is a smaller pool of talent for a government civil service to draw upon.

# _2. Political Institutions_

Von Hagen (2002) lists three options for bringing spending levels closer to the social optimum. These include the adoption of electoral rules that encourage political accountability and competition; the adoption of fiscal rules, such as a prohibition against borrowing; and the adoption of better decision making procedures. He notes that there is an accumulation of strong empirical evidence that governments that incorporate one or more of these elements of cost centralization tend to have lower spending, lower fiscal deficits and less debt that those lacking them. These ideas can also be adapted to help explain cross country patterns of budget deviations.

The next several hypotheses therefore focus on the impact of political institutions and rules governing elections. These are grouped according to the following typology: autocracies versus anocracies versus democracies<sup>25</sup> , and, within the democracies, executives elected by voters versus those elected by parliaments and plurality voting versus proportional voting for seats within parliaments or legislatures. Table 5 shows how the observations within the sample are classified according to this typology.

|**TABLE5—TYPOLOGY OFPOLITICALINSTITUTIONS**|
|---|

||**Proportional**|**Plurality**|**Mixed**|**No Data**|**Total**|
|---|---|---|---|---|---|
|**Presidential**|**21**|**39**|**41**|**0**|**101**|
|Autocracy (Polity IV score -10 to -6)|0|4|5|0|9|
|Anocracy (Polity IV score -5 to +5)|8|34|23|0|65|
|Democracy (Polity IV score =6 to +10)|11|1|12|0|24|
|No data|2|0|1|0|3|
|**Other Systems a/**|**12**|**25**|**9**|**0**|**46**|
|Autocracy (Polity IV score -10 to -6)|0|0|0|0|0|
|Anocracy (Polity IV score -5 to +5)|0|3|4|0|7|
|Democracy (PolityIV score =6 to +10)|12|22|5|0|39|
|**No Data**|**0**|**0**|**0**|**12**|**12**|
|**Total**|**33**|**64**|**50**|**12**|**159**|
|Autocracy (Polity IV score -10 to -6)|0|4|5|0|9|
|Anocracy (Polity IV score -5 to +5)|8|37|27|0|72|
|Democracy (Polity IV score =6 to +10)|23|23|17|0|63|
|No data|2|0|1|12|15|

a. Non-presidential systems include parliamentary and mixed systems. _Sources:_ Polity IV database (Marshall, Jaggers, and Gurr) and the Database of Political Institutions (Beck).

25 Based on Polity2 scores from the Polity IV database provided by Marshall, Jaggers, and Gurr (2010) at http://www.systemicpeace.org/polity/polity4.htm. These scores range from -10 for a hereditary monarchy (pure autocracy) to +10 for a consolidated democracy. Anocracies are those countries with scores in the middle. The empirical tests use the full 21 point scale.

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