The political legislation cycle

The economic theory of legislation holds that laws, even when they do not involve financial resources, redistribute property rights. Politicians supply legislation to groups with the highest political return. By the same logic, politicians should supply legislation when doing so has the highest political return. The dynamics of the supply of legislation should follow the pattern suggested by the political business cycle theory. We develop a model of government's and voters' behavior where a legislation cycle is the strategy to hold the government (coalition) together. Under certain assumptions, the model predicts that the approbation of laws should be concentrated at the end of the legislature and be positively related to the fragmentation of the government coalition. We test these restrictions on data about the supply of legislation by the Italian Parliament during legislatures from I to XIII (1948 to 2001). The empirical analysis provides strong support to the theory: a legislation cycle occurs when the conditioning phenomena that the model indicates are satisfied.