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Kiewiet and McCubbins: Appropriations decisions as a bilateral bargaining game between president and Congress

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Kiewiet and McCubbins. 1985. Appropriations decisions as a bilateral bargaining game between president and Congress. LSQ 10.

Game-Theoretic Model

K and M present a game-theoretic model of presidential-Congressional bargaining. Both sides seek to maintain their electoral constituencies (which determines their ideal points), and both sides behave strategically in light of what they expect the other to do (which determines actual proposals). The president (OMB) moves first, exercising partial agenda control. The Congress then modifies this proposal and asks the president for approval or veto. Vetoes lead to a repeat of the game.

Strategies and Equilibria

Each side can play a reactive or accomodative strategy (or, presumably, a sincere one). With the reactive strategy, you propose a level of spending that is even further from the other side's ideal point than a sincere proposal would be. With the accomodative strategy, you do the opposite: you propose a level of spending that is closer to the other side's ideal point than a sincere proposal would be.

For example, suppose the president wants $10 for an agency and Congress wants $20. The president can be sincere (propose $10), reactive (propose $8), or accomodative (propose $15). Similarly, Congress can respond by being sincere ($20), reactive ($30), or accomodative ($15).

K and M argue that rational presidents and congresses will be accomodative. Reactive strategies present excessive political risks. (See pgs 183-184). Reactive strategies risks conflict, hence legislative impasse or presidential veto--either of which is damaging politically, eats up legislative time, and forces passage of a continuing resolution.

Place in the Literature

Argues against Niskanen, who saw the executive agencies as monopolistic producers and the legislature as a monopsonistic consumer, which faced take-it-or-leave-it offers from the executive. Also argues against the Davis, Dempster, and Wildavsky view that the executive was not strategic.

Estimation/Findings

Two stage least squares, simulatenous estimation. Uses controls for macroeconomic conditions, party, and war.