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The cyclicality of government foreign-aid expenditure: voter awareness in “good” times and in “bad”

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  • Andrew Abbott

    (Lancaster University)

  • Philip Jones

    (University of Bath)

Abstract

While it has been argued that the cyclicality of government spending likely depends on the intensities of political pressure to increase expenditure, in economic upturns and downturns, it is important to explore the determinants of changes in the strengths of those pressures. This paper is the first (to our knowledge) to focus on the relevance of systematic changes in voter awareness of government spending. Predictions of the impact of changes in awareness are tested with reference to 23 OECD donor countries’ foreign aid expenditures over the 1999–2015 period. The evidence offers insights into the discretion governments exercise when “fiscal illusion” increases and into the policy implications of systematic changes in voter awareness (in “good” times and in “bad”).

Suggested Citation

  • Andrew Abbott & Philip Jones, 2021. "The cyclicality of government foreign-aid expenditure: voter awareness in “good” times and in “bad”," Public Choice, Springer, vol. 186(1), pages 97-117, January.
    • Handle: RePEc:kap:pubcho:v:186:y:2021:i:1:d:10.1007_s11127-019-00757-6
    DOI: 10.1007/s11127-019-00757-6
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    More about this item

    Keywords

    Government expenditure; Foreign aid; Fiscal illusion; Voracity effects;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General

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