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Political budget cycles in the European Union and the impact of political pressures

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  • Georgios Efthyvoulou

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Abstract

This paper investigates the presence of political budget cycles (PBCs) in the European Union using data from all 27 member states over the period 1997–2008, and explores their variability across countries and over time. Three basic results emerge: First, incumbent governments across the EU tend to engineer PBCs in order to enhance their re-election prospects. Second, PBCs are much larger and statistically more robust in the Eurozone countries than in the countries that have not yet adopted the euro. Third, the degree to which governments manipulate fiscal policy is negatively correlated with non-economic voting and positively correlated with electoral competitiveness. Copyright Springer Science+Business Media, LLC 2012

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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 153 (2012)
Issue (Month): 3 (December)
Pages: 295-327

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Handle: RePEc:kap:pubcho:v:153:y:2012:i:3:p:295-327

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Web page: http://www.springerlink.com/link.asp?id=100332

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Keywords: Political budget cycles; Fiscal policy; Elections; Opinion polls; European Union; D72; E62; P16; C33;

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Cited by:
  1. Niklas Potrafke, 2014. "The Evidence on Globalization," CESifo Working Paper Series 4708, CESifo Group Munich.
  2. Mechtel, Mario & Potrafke, Niklas, 2011. "Electoral Cycles in Active Labor Market Policies," University of Tuebingen Working Papers in Economics and Finance 2, University of Tuebingen, Faculty of Economics and Social Sciences.
  3. Spyros Skouras & Nicos Christodoulakis, 2011. "Electoral Misgovernance Cycles: Evidence from wildfires and tax evasion in Greece and elsewhere," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 47, Hellenic Observatory, LSE.
  4. Toke Aidt & Graham Mooney, 2014. "Voting Suffrage and the Political Budget Cycle: Evidence from the London Metropolitan Boroughs 1902-1937," CESifo Working Paper Series 4614, CESifo Group Munich.
  5. Maria Teresa Balaguer-Coll & María Isabel Brun-Martos & Anabel Forte & Emili Tortosa-Ausina, 2014. "Determinants of local governments'­ reelection: New evidence based on a Bayesian approach," Working Papers 2014/06, Economics Department, Universitat Jaume I, Castellón (Spain).
  6. Georgios Efthyvoulou, 2008. "Political Cycles in a Small Open Economy and the Effect of Economic Integration: Evidence from Cyprus," Birkbeck Working Papers in Economics and Finance 0808, Birkbeck, Department of Economics, Mathematics & Statistics.
  7. Richard Jong-A-Pin & Jan-Egbert Sturm & Jakob de Haan, 2012. "Using Real-Time Data to Test for Political Budget Cycles," CESifo Working Paper Series 3939, CESifo Group Munich.
  8. Toke Aidt & Graham Mooney, 2014. "Voter suffrage and the political budget cycle: evidence from the London Metropolitan Boroughs 1902-1937," Cambridge Working Papers in Economics 1401, Faculty of Economics, University of Cambridge.
  9. Jeroen Klomp & Jakob Haan, 2013. "Political budget cycles and election outcomes," Public Choice, Springer, vol. 157(1), pages 245-267, October.
  10. Solomos, Dionysios & Papageorgiou, Theofanis & Koumparoulis, Dimitrios, 2012. "Financial Sector and Business Cycles Determinants in the EMU context: An Empirical Approach (1996-2011)," MPRA Paper 43858, University Library of Munich, Germany.
  11. Merola, Rossana & Pérez, Javier J., 2013. "Fiscal forecast errors: Governments versus independent agencies?," European Journal of Political Economy, Elsevier, vol. 32(C), pages 285-299.
  12. Soeren Enkelmann & Markus Leibrecht, 2013. "Political Expenditure Cycles and Election Outcomes Evidence from Disaggregation of Public Expenditures by Economic Functions," Working Paper Series in Economics 275, University of Lüneburg, Institute of Economics.
  13. Jakob Haan & Jeroen Klomp, 2013. "Conditional political budget cycles: a review of recent evidence," Public Choice, Springer, vol. 157(3), pages 387-410, December.
  14. Vincenzo Bove & Georgios Efthyvoulou & Antonio Navas, 2013. "Political Cycles in Public Expenditure: Butter vs Guns," Working Papers 2013016, The University of Sheffield, Department of Economics.

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