Fiscal Independence from Electorate Accountability

By Rafael Acevedo, Hugo J. Faria, Hugo M. Montesinos-Yufa, Carlos Navarro

Creighton University, USA.
University of Miami, USA.
Ursinus College, USA.
Instituto de Estudios Superiores de Administración, Venezuela.


This book is based on an intuitive idea: National governors tend toward rapacity if not checked. In order not to be dominated and despoiled, the people—or the electorate—must have some way of making governors accountable for their spending. Honest elections are the most basic means of exerting such accountability, but they are not the only way. When governors are not fiscally accountable, we say they are “fiscally independent.”

Inspired by historical divergent political-economic paths in England, France, Portugal, and Spain, we examine the modern conditionally estimated effects of government being fiscally independent. This study documents that higher levels of fiscal independence are associated with detrimental effects on the quality of democracy, the rule of law, judicial independence, freedom of speech, clean elections, and other desirable outcomes. Fiscal independence is detrimental to human well-being. Fiscal independence is also associated with greater state ownership of productive assets and dictatorship.

Our proxy for fiscal independence is a novel and sturdy conditional determinant of political development. Finally, years of education are also conditionally determined by fiscal independence.


By Daniel Klein, George Mason University


1. Introduction
2. Contributions to the Related Literature
3. Abbreviated Historical Background
4. Data
5. Empirical Strategy
6. Main Results
7. Concluding Remarks


About Author

Dr. Hugo M. Montesinos-Yufa: I was born and raised in Venezuela, where I studied industrial (production) engineering and earned a Ph.D. in engineering with a concentration in statistics. In 2013, I was a professor at Universidad Simon Bolivar (USB) and the Instituto de Estudios Superiores de Administracion (IESA), both located in Caracas, Venezuela. At USB, I broadly taught in the areas of industrial engineering, quality control, probability, and statistics. At IESA, I mostly taught quantitative methods, business statistics, and research methods. In 2014, I moved to the U.S. to pursue a Ph.D. in economics with a concentration in economic development at Florida State University (FSU). Given the difficult situation in Venezuela, life was giving me a big opportunity, and I took it! At first, it was a challenge to be a student again, but at the end, I did so successfully and enjoyed one of the most remarkable periods of my life. I learned a lot, improved my research, and practiced some old hobbies like playing guitar, rollerblading, and playing table tennis (I was in the FSU Table Tennis team and participated in several national and regional competitions). I also had the immense privilege to closely work with my FSU advisor, James Gwartney. On August 19 of 2019, I successfully defended my dissertation at FSU, culminating this “second” stage as a student. On the next day I started teaching activities at Ursinus College, PA, USA. I am currently an assistant professor of Statistics in the Department of Mathematics and Computer Science at Ursinus College. After leaving my parents, extended family, and friends in Venezuela, I have been incredibly blessed to have found my wonderful wife, the love of my life, and a wonderful job both at the same place and time.



Date of Publication

December 25, 2022

File Size: 2804 KB
Length: xi + 75 pages

Other KSP Books

Other KSP Books