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Political budget cycles in U.S. municipalities

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  • C. Bee
  • Shawn Moulton

Abstract

This paper tests for political budget cycles among U.S. municipalities. According to the political budget cycle hypothesis, in election years government officials engage in opportunistic fiscal policy manipulation for electoral gains. We test that hypothesis using data on taxes, spending, and employment for a panel of 268 U.S. cities over the period 1970–2004. While our estimates provide no evidence of altered total expenditures or taxes in election years, we do find a 0.7 % increase in total municipal employment, including increases in police, education, and sanitation employment. Copyright Springer-Verlag Berlin Heidelberg 2015

Suggested Citation

  • C. Bee & Shawn Moulton, 2015. "Political budget cycles in U.S. municipalities," Economics of Governance, Springer, vol. 16(4), pages 379-403, November.
    • Handle: RePEc:spr:ecogov:v:16:y:2015:i:4:p:379-403
    DOI: 10.1007/s10101-015-0171-z
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    Cited by:

    1. Peter Spáč, 2021. "Pork barrel politics and electoral returns at the local level," Public Choice, Springer, vol. 188(3), pages 479-501, September.
    2. Resce, Giuliano, 2022. "The impact of political and non-political officials on the financial management of local governments," Journal of Policy Modeling, Elsevier, vol. 44(5), pages 943-962.
    3. Cahan, Dodge, 2017. "Electoral cycles in government employment: Evidence from US gubernatorial elections," University of California at San Diego, Economics Working Paper Series qt8wn83441, Department of Economics, UC San Diego.
    4. Bertoli, Paola & Grembi, Veronica, 2021. "The political cycle of road traffic accidents," Journal of Health Economics, Elsevier, vol. 76(C).
    5. Cahan, Dodge, 2019. "Electoral cycles in government employment: Evidence from US gubernatorial elections," European Economic Review, Elsevier, vol. 111(C), pages 122-138.
    6. Resce, Giuliano, 2022. "Political and Non-Political Officials in Local Government," Economics & Statistics Discussion Papers esdp22079, University of Molise, Department of Economics.
    7. Takaku, Reo & Bessho, Shun-ichiro, 2018. "Political cycles in physician employment: A case of Japanese local public hospitals," Social Science & Medicine, Elsevier, vol. 216(C), pages 97-106.
    8. García, Israel & Hayo, Bernd, 2021. "Political budget cycles revisited: Testing the signalling process," European Journal of Political Economy, Elsevier, vol. 69(C).
    9. Leśniewska-Napierała Katarzyna & Napierała Tomasz, 2022. "Municipal investment expenditures by pork-barrel mayors: evidence from a transition economy," Miscellanea Geographica. Regional Studies on Development, Sciendo, vol. 26(2), pages 94-100, April.
    10. Krzysztof Beck & Michał Możdżeń, 2020. "Institutional Determinants of Budgetary Expenditures. A BMA-Based Re-Evaluation of Contemporary Theories for OECD Countries," Sustainability, MDPI, vol. 12(10), pages 1-31, May.

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    More about this item

    Keywords

    Political budget cycle; Local fiscal policy; D72; D78; H3; P16;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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