Why are some governments more effective in controlling spending while others fall prey to excessive overspending by individual cabinet ministers? We approach this question by opening the "black box" of intra-cabinet decision-making. Using individual cabinet members' contributions to budget debates in Ireland, we estimate their positions on a latent dimension that represents their relative levels of support or opposition to the cabinet leadership. We find that during economic good times ministers who are ideologically close to the finance minister receive a larger share of the government budget, while during economic bad times closeness to the prime minister is a better predictor of budget share. Our results therefore cast doubt on the idea that delegating fiscal responsibility to a finance minister will prevent overspending, as the effectiveness of this mechanism crucially depends on both the economic environment as well as on the relationship between the prime minister and the finance minister.
