IDEAS home Printed from https://ideas.repec.org/a/lrc/larijb/v6y2016i8p31-42.html
   My bibliography  Save this article

Political Budget Cycle: Mexican Town Halls Case

Author

Listed:
  • JEdgar Alfredo Nande Vazque

    (Universidad de Colima.)

  • Juan Carlos Martínez

    (University of Sonora.)

Abstract

In the current economic context, one of the issues of concern is the growth of public spending of municipalities of Mexico and thus increasing public debt. This combines the traditional interest that literature has been devoted to the relationship between economics and politics from the perspective of Political Budget Cycle. The aim of this paper is to analyze the effect of elections in public expenditure management. To this end, a system based on the Generalized Method of Moments (GMM), which uses instrumental variables based on delays and differences of all variables in the model estimator was used. Our findings indicate that there is an expansion of total expenditure, spending on public works and infrastructure and current expenditure contracted work, indicating the preference of politicians for using investment spending to influence voter behavior. The work also notes that citizens value the policies of public expenditure management when making their voting decisions.

Suggested Citation

  • JEdgar Alfredo Nande Vazque & Juan Carlos Martínez, 2016. "Political Budget Cycle: Mexican Town Halls Case," International Journal of Business and Social Research, LAR Center Press, vol. 6(8), pages 31-42, August.
    • Handle: RePEc:lrc:larijb:v:6:y:2016:i:8:p:31-42
    as

    Download full text from publisher

    File URL: http://thejournalofbusiness.org/index.php/site/article/view/978/623
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Vicente, Cristina & Ríos, Ana-María & Guillamón, María-Dolores, 2013. "Voting behavior and budget stability," Revista de Contabilidad - Spanish Accounting Review, Elsevier, vol. 16(1), pages 46-52.
    2. Marika Cioffi & Giovanna Messina & Pietro Tommasino, 2012. "Parties, institutions and political budget cycles at the municipal level," Temi di discussione (Economic working papers) 885, Bank of Italy, Economic Research and International Relations Area.
    3. Toke Aidt & Francisco Veiga & Linda Veiga, 2011. "Election results and opportunistic policies: A new test of the rational political business cycle model," Public Choice, Springer, vol. 148(1), pages 21-44, July.
    4. Kenneth Rogoff & Anne Sibert, 1988. "Elections and Macroeconomic Policy Cycles," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 55(1), pages 1-16.
    5. Linda Veiga & Francisco Veiga, 2007. "Political business cycles at the municipal level," Public Choice, Springer, vol. 131(1), pages 45-64, April.
    6. Allan DRAZEN & Marcela ESLAVA, 2003. "The political business cycle in Colombia on the National and Regional level," Archivos de Economía 3616, Departamento Nacional de Planeación.
    7. William D. Nordhaus, 1975. "The Political Business Cycle," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(2), pages 169-190.
    8. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    9. Rogoff, Kenneth, 1990. "Equilibrium Political Budget Cycles," American Economic Review, American Economic Association, vol. 80(1), pages 21-36, March.
    10. Drazen, Allan & Brender, Adi, 2003. "Where Does the Political Budget Cycle Really Come From?," CEPR Discussion Papers 4049, C.E.P.R. Discussion Papers.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. JEdgar Alfredo Nande Vazque & Juan Carlos Martínez, 2016. "Political Budget Cycle: Mexican Town Halls Case," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 6(8), pages 31-42, August.
    2. Manuela Krause, 2019. "Communal fees and election cycles: Evidence from German municipalities," ifo Working Paper Series 293, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    3. Niklas Potrafke, 2012. "Political cycles and economic performance in OECD countries: empirical evidence from 1951–2006," Public Choice, Springer, vol. 150(1), pages 155-179, January.
    4. Foremny, Dirk & Freier, Ronny & Moessinger, Marc-Daniel & Yeter, Mustafa, 2014. "Overlapping political budget cycles in the legislative and the executive," ZEW Discussion Papers 14-099, ZEW - Leibniz Centre for European Economic Research.
    5. Castro, Vítor & Martins, Rodrigo, 2018. "Politically driven cycles in fiscal policy: In depth analysis of the functional components of government expenditures," European Journal of Political Economy, Elsevier, vol. 55(C), pages 44-64.
    6. Jan Kluge & Gunther Markwardt & Christian Thater, 2017. "Self-Preserving Leviathans Evidence from Local-Level Data," Kyklos, Wiley Blackwell, vol. 70(4), pages 594-621, November.
    7. Jakob Haan & Jeroen Klomp, 2013. "Conditional political budget cycles: a review of recent evidence," Public Choice, Springer, vol. 157(3), pages 387-410, December.
    8. Vítor Castro & Rodrigo Martins, 2018. "The Electoral Dynamics of Human Development," Journal of Development Studies, Taylor & Francis Journals, vol. 54(1), pages 191-211, January.
    9. Bernardino Benito & Francisco Bastida & Cristina Vicente, 2013. "Municipal elections and cultural expenditure," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 37(1), pages 3-32, February.
    10. Bernardino Benito & Francisco Bastida & Cristina Vicente, 2013. "Creating Room for Manoeuvre: a Strategy to Generate Political Budget Cycles under Fiscal Rules," Kyklos, Wiley Blackwell, vol. 66(4), pages 467-496, November.
    11. Dirk Foremny & Ronny Freier & Marc-Daniel Moessinger & Mustafa Yeter, 2018. "Overlapping political budget cycles," Public Choice, Springer, vol. 177(1), pages 1-27, October.
    12. Dalle Nogare, Chiara & Kauder, Björn, 2017. "Term limits for mayors and intergovernmental grants: Evidence from Italian cities," Regional Science and Urban Economics, Elsevier, vol. 64(C), pages 1-11.
    13. Jorge M. Streb & Daniel Lema & Gustavo Torrens, 2009. "Checks and Balances on Political Budget Cycles: Cross‐Country Evidence," Kyklos, Wiley Blackwell, vol. 62(3), pages 426-447, August.
    14. Dilla, Diana, 2017. "Staatsverschuldung und Verschuldungsmentalität [Public Debt and Debt Mentality]," MPRA Paper 79432, University Library of Munich, Germany.
    15. Gupta, Sanjeev & Liu, Estelle X. & Mulas-Granados, Carlos, 2016. "Now or later? The political economy of public investment in democracies," European Journal of Political Economy, Elsevier, vol. 45(C), pages 101-114.
    16. V�tor Castro & Rodrigo Martins, 2016. "Are there political cycles hidden inside government expenditures?," Applied Economics Letters, Taylor & Francis Journals, vol. 23(1), pages 34-37, January.
    17. Linda G. Veiga & Georgios Efthyvoulou & Atsuyoshi Morozumi, 2018. "Political Budget Cycles: Conditioning Factors and New Evidence," NIPE Working Papers 21/2018, NIPE - Universidade do Minho.
    18. Frank Bohn & Francisco José Veiga, 2019. "Political Budget Forecast Cycles," NIPE Working Papers 12/2019, NIPE - Universidade do Minho.
    19. Akhmed Akhmedov & Ekaterina Zhuravskaya, 2004. "Opportunistic Political Cycles: Test in a Young Democracy Setting," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(4), pages 1301-1338.
    20. Bove, Vincenzo & Efthyvoulou, Georgios & Navas, Antonio, 2017. "Political cycles in public expenditure: butter vs guns," Journal of Comparative Economics, Elsevier, vol. 45(3), pages 582-604.

    More about this item

    Keywords

    Elections; political budget cycle; public spending.;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lrc:larijb:v:6:y:2016:i:8:p:31-42. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Al Hossain (email available below). General contact details of provider: http://www.thejournalofbusiness.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.