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Politico-Economic Interactions in Canada: an Empirical Assessment

Author

Listed:
  • François Pétry

    (Laval University)

  • Howard R. Harmatz

    (University of Manitoba)

Abstract

This study examines the respective impact of economic and political factors on federal public expenditure by replicating the Frey and Schneider politico-economic model with Canadian data from 1954 to 1992. We show that federal expenditure has been sensitive to (a) the rate of unemployment and the real wage rate and (b) the interplay of reelection and ideological influences. Although partisan cycles fail to appear when pohtico-economic interactions are specified, following the general Frey and Schneider model, they emerge when we adjust the general model to take into account specific Canadian institutional features, namely, the existence of minority governments, and the Quebec origin of the government leader .

Suggested Citation

  • François Pétry & Howard R. Harmatz, 1995. "Politico-Economic Interactions in Canada: an Empirical Assessment," Public Finance Review, , vol. 23(3), pages 305-335, July.
    • Handle: RePEc:sae:pubfin:v:23:y:1995:i:3:p:305-335
    DOI: 10.1177/109114219502300302
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    References listed on IDEAS

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    Cited by:

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    2. Christian Bjørnskov & Niklas Potrafke, 2012. "Political Ideology and Economic Freedom Across Canadian Provinces," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 38(2), pages 143-166.
    3. Voia, Marcel-Cristian & Ferris, J. Stephen, 2013. "Do business cycle peaks predict election calls in Canada?," European Journal of Political Economy, Elsevier, vol. 29(C), pages 102-118.

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