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Political budget cycles, incumbency advantage, and propaganda

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  • Frank Bohn

Abstract

This paper combines incumbency advantage and political budget cycle theory. An opportunistic politician is given two instruments: deficit‐financed transfers and propaganda. Unlike earlier analytical models, but in accordance with the empirical literature, government manipulations do actually improve re‐election chances. However, the optimal level of government manipulation depends on country characteristics, in particular the competence dispersion among potential candidates. This may explain why it is easier to detect political budget cycles in, for instance, developing countries or new democracies. Results are robust to alternative competence distribution and propaganda cost assumptions.

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  • Frank Bohn, 2019. "Political budget cycles, incumbency advantage, and propaganda," Economics and Politics, Wiley Blackwell, vol. 31(1), pages 43-70, March.
    • Handle: RePEc:bla:ecopol:v:31:y:2019:i:1:p:43-70
    DOI: 10.1111/ecpo.12122
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    Cited by:

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    5. Frank Bohn & Francisco José Veiga, 2019. "Political Budget Forecast Cycles," NIPE Working Papers 12/2019, NIPE - Universidade do Minho.
    6. Batabyal, Amitrajeet A. & Beladi, Hamid, 2022. "A political-economy perspective on mayoral elections and urban crime," Socio-Economic Planning Sciences, Elsevier, vol. 79(C).
    7. García, Israel & Hayo, Bernd, 2021. "Political budget cycles revisited: Testing the signalling process," European Journal of Political Economy, Elsevier, vol. 69(C).
    8. Bohn, Frank & Veiga, Francisco José, 2021. "Political forecast cycles," European Journal of Political Economy, Elsevier, vol. 66(C).
    9. Frank Bohn & Francisco José Veiga, 2019. "Political Budget Forecast Cycles," NIPE Working Papers 12/2019, NIPE - Universidade do Minho.
    10. George Petrakos & Konstantinos Rontos & Luca Salvati & Chara Vavoura & Ioannis Vavouras, 2022. "Toward a political budget cycle? Unveiling long-term latent paths in Greece," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(5), pages 3379-3394, October.
    11. Paritosh Chandra Sinha, 2021. "Attention to the Election-Economics-Politics (EEP) Nexus in the Indian Stock Markets," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 13(1), pages 7-32, June.

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