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Political Effects on the Allocation of Public Expenditures: Empirical Evidence from OECD Countries

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  • Niklas Potrafke

Abstract

This paper examines the effects of political determinants on the allocation of public expenditures. Analyzing an OECD panel from 1990 to 2004, a SURE model controls for the contemporaneous correlation between the different expenditure categories (COFOG). I find that left governments set other priorities than right governments: In particular, they increase spending for "Environment protection", "Recreation; Culture and Religion" and "Education". The number of coalition partners as well as minority governments affects the allocation of public expenditures, too. In contrast, there are no election and pre-election year effects.

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Bibliographic Info

Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 653.

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Length: 21 p.
Date of creation: 2006
Date of revision:
Handle: RePEc:diw:diwwpp:dp653

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Keywords: Allocation of public expenditures; partisan politics;

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Cited by:
  1. Margarita Katsimi & Vassilis Sarantides, 2012. "Do elections affect the composition of fiscal policy in developed, established democracies?," Public Choice, Springer, vol. 151(1), pages 325-362, April.
  2. Niklas Potrafke, 2007. "Social Expenditures as a Political Cue Ball?: OECD Countries under Examination," Discussion Papers of DIW Berlin 676, DIW Berlin, German Institute for Economic Research.
  3. Niklas Potrafke, 2006. "Political Effects on the Allocation of Public Expenditures: Empirical Evidence from OECD Countries," Discussion Papers of DIW Berlin 653, DIW Berlin, German Institute for Economic Research.

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