Revisiting the Effect of Supermajority Requirements on Fiscal Outcomes

Abstract

I use event study and synthetic control methods on a panel of American states over the period 1960 -- 2008 to test whether adoption of a supermajority requirement impacts state-level expenditures and tax revenue. I find evidence that supermajority requirements lead to a sustained reduction in welfare expenditures per capita and limited evidence that these requirements lead to an increase in corporate tax revenue per capita. I find no evidence that supermajority requirements affect overall state expenditures or tax revenue. These results differ from previous studies, which could be explained by the use of alternative estimation methods and control variables, and differences in which states are considered supermajority requirement adopters and the years in which those requirements go into effect.