Political budget cycles and election outcomes
AbstractThis paper addresses two empirical questions. Is fiscal policy affected by upcoming elections? If so, do election-motivated fiscal policies enhance the probability of re-election of the incumbent? Employing data for 65 democratic countries over 1975–2005 in a semi-pooled panel model, we find that in most countries fiscal policy is hardly affected by elections. The countries for which we find a significant political budget cycle are very diverse. They include ‘young’ democracies but also ‘established’ democracies. In countries with a political budget cycle, election-motivated fiscal policies have a significant positive (but fairly small) effect on the electoral support for the political parties in government. Copyright The Author(s) 2013
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Bibliographic InfoArticle provided by Springer in its journal Public Choice.
Volume (Year): 157 (2013)
Issue (Month): 1 (October)
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Web page: http://www.springerlink.com/link.asp?id=100332
Election outcomes; Political budget cycles; Multilevel model; E62; H62;
Find related papers by JEL classification:
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
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