Political Budget Cycles: A Review of Recent Developments
AbstractThis paper provides a review of recent developments in the theory and evidence of political budget cycles. Specifically, we discuss three areas where significant progress has been made. First, new theoretical explanations (models) have been proposed where political budget cycles arise as the result of a moral hazard problem between the government and the electorate. Second, more sophisticated empirical methods, in particular, time series methods appropriate for dynamic panel data regressions, have been adopted in cross-country analyses. Last but not least, the focus of recent studies has shifted from industrialized countries to all (including developing) countries, and from the existence of political budget cycles to the magnitude and composition (revenue vs. spending) of these cycles.
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Bibliographic InfoArticle provided by Nordic Journal of Political Economy in its journal Nordic Journal of Political Economy.
Volume (Year): 29 (2003)
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Political budget cycles; dynamic panel estimation; developing countries;
Find related papers by JEL classification:
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
- P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
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