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Political budget cycles and election outcomes

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  • Jeroen Klomp
  • Jakob Haan

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    Abstract

    This 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 Info

    Article provided by Springer in its journal Public Choice.

    Volume (Year): 157 (2013)
    Issue (Month): 1 (October)
    Pages: 245-267

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    Handle: RePEc:kap:pubcho:v:157:y:2013:i:1:p:245-267

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

    Related research

    Keywords: Election outcomes; Political budget cycles; Multilevel model; E62; H62;

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    Cited by:
    1. Klomp, Jeroen & de Haan, Jakob, 2013. "Popular protest and political budget cycles: A panel data analysis," Economics Letters, Elsevier, vol. 120(3), pages 516-520.
    2. Bove, Vincenzo & Efthyvoulou, Georgios, 2013. "Political Cycles in Public Expenditure: Butter vs Guns," NEPS Working Papers 7/2013, Network of European Peace Scientists.
    3. 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.
    4. Niklas Potrafke & Markus Reischmann & Marina Riem & Christoph Schinke & David Streich, 2014. "Wirtschaftslage und Regierungsideologie in Europa," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 67(09), pages 18-25, 05.
    5. 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.

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