QoG lunch seminar with Martin Lundstedt

This seminar is a 50% doctoral seminar. 

Abstract: Important areas of economic policymaking lie beyond governments’ control. Legal rules limit the decision-making authority and permissible choice set of governments. Existing research studies these constraints through separate concepts and policy-specific measures, providing no common basis for comparing how constrained governments are across policy domains. I develop a framework that distinguishes between constraints on government decision-making authority and constraints on substantive policy options. I operationalize this distinction across competition, monetary, and trade policy and use large language models to extract and code constraints from a corpus of competition law, central bank law, and trade agreements, producing a global country-year dataset from 1950–2025. The results show that governments are substantially but unevenly constrained. In monetary policy governments are constrained primarily through restriction on decision-making authority, whereas in competition and trade policy constraints primarily restrict options. Legal constraints have increased markedly since 1950, although through different trajectories across policy domains. Despite a common suggestion that constraints on government have declined in the last decade there is little evidence of a general rollback of constraint on government in economic policymaking.