Opportunistic Political Cycles: Test in a Young Democracy Setting
AbstractDespite the fact that theoretical research on opportunistic political cycles is very intuitive and well developed, empirical literature has found fairly weak evidence of opportunistic political cycles. This Paper tests the theory in a decade-old democracy – Russia. We find strong evidence of very short opportunistic political cycles and provide evidence and explanation why many previous attempts to find evidence failed. Using a comprehensive list of Russia's regional elections and regional monthly panel data between 1996 and 2001, we find that: (1) opportunistic political cycles in regional fiscal policies are sizable and short-lived on average; (2) the magnitude of opportunistic cycles decreases with voters' rationality and awareness (measured by urbanization, computerization, education, and freedom of media); (3) there is a learning curve for voters: cycles become smaller with time; (4) cycles in fiscal policies increase political popularity and the re-election chances of incumbent governors. Our results confirm that maturity of democracy as well as rationality and awareness of the electorate are very important factors in determination of the scope for opportunistic cycles.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3855.
Date of creation: Apr 2003
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Find related papers by JEL classification:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
- P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
- P35 - Economic Systems - - Socialist Institutions and Their Transitions - - - Public Finance
This paper has been announced in the following NEP Reports:
- NEP-POL-2003-07-13 (Positive Political Economics)
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- Peter Isard & Allan Drazen, 2004. "Can Public Discussion Enhance Program Ownership?," IMF Working Papers 04/163, International Monetary Fund.
- Allan Drazen & Peter Isard, 2004. "Can Public Discussion Enhance Program Ownership?," NBER Working Papers 10927, National Bureau of Economic Research, Inc.
- Ponomareva, Maria & Zhuravskaya, Ekaterina, 2004. "Federal Tax Arrears in Russia: Liquidity Problems, Federal Redistribution or Russian Resistance?," CEPR Discussion Papers 4267, C.E.P.R. Discussion Papers.
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