The electoral fiscal multiplier

The paper argues that in electoral times, a competent and opportunistic government switches from wasteful spending (e.g. pork-barrel) to non-wasteful spending. The result is that a fiscal shock crowds-in private consumption and the multiplier is greater than unity, but only around elections. In non-electoral times, private consumption is crowded out and non-Keynesian results apply. The empirical analysis allows for state-dependence of the multiplier and confirms that in electoral quarters, the multiplier is larger than one. Conversely, in non-electoral quarters, the multiplier is not different from zero.