This file is part of IDEAS , which uses RePEc data
[ Papers |
Articles |
Software |
Books |
Chapters |
Authors |
Institutions |
JEL Classification |
NEP reports |
Search |
New papers by email |
Author registration |
Rankings |
Volunteers |
FAQ |
Blog |
Help! ]
A theory of political cycles Author info | Abstract | Publisher info | Download info | Related research | Statistics Leonardo Martinez
The literature on political cycles argues that the proximity of elections affects policy choices. This literature considers that opportunistic policymakers manipulate policy to increase their reelection probability. Previous theoretical studies assume that the policymaker can affect his reelection probability only with his last decision before the election. This assumption seems extreme, and directly produces a cycle without presenting a theory of why a policymaker's behavior is different closer to the election. We shall explain how, without this assumption, existing political-agency models can still produce cycles. In contrast to previous (theoretical and empirical) studies, we consider how the policymaker's decisions depend on his reputation (the beliefs about his future performance). Since the policymaker's reputation most likely changes over time, in general, one cannot conclude from observing the same behavior throughout the policymaker's term that the proximity of elections does not affect policy choices. Consequently, our findings suggest reinterpreting previous empirical results and controlling for changes in reputation in future empirical studies. More generally, our results deepen the understanding of agency relationships in which the agent's compensation is decided infrequently.
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file . Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Paper provided by Federal Reserve Bank of Richmond in its series Working Paper with number
05-04.
Download reference. The following formats are available: HTML ,
plain text ,
BibTeX ,
RIS (EndNote),
ReDIF
Length:
Date of creation: 2005Date of revision:
Handle: RePEc:fip:fedrwp:05-04Contact details of provider: Web page: http://www.richmondfed.org/ More information through EDIRC
Order Information: Email: Web: http://www.richmondfed.org/publications/
For technical questions regarding this item, or to correct its listing, contact: (Diane Rosenberger).
Keywords: Political science This paper has been announced in the following NEP Reports :
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.: Timothy Besley & Anne Case, 1993.
"Does Electoral Accountability Affect Economic Policy Choices? Evidence from Gubernatorial Term Limits ,"
NBER Working Papers
4575, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions: Akhmed Akhmedov & Ekaterina Zhuravskaya, 2004.
"Opportunistic Political Cycles: Test in a Young Democracy Setting ,"
Economics Working Papers
0047, Institute for Advanced Study, School of Social Science.
[Downloadable!]
Other versions: Schuknecht, Ludger, 1996.
"Political Business Cycles and Fiscal Policies in Developing Countries ,"
Kyklos ,
Blackwell Publishing, vol. 49(2), pages 155-70.
Banks, J.S. & Sundaram, R.K., 1990.
"Incumbents, Challengers, And Bandits: Bayesian Learning In A Dynamic Choice Model ,"
RCER Working Papers
235, University of Rochester - Center for Economic Research (RCER).
Persson, Torsten & Tabellini, Guido, 1997.
"Political Economics and Macroeconomic Policy ,"
CEPR Discussion Papers
1759, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Other versions:
Persson, T. & Tabellini, G., 1997.
"Political Economics and Macroeconomic Policy ,"
Papers
630, Stockholm - International Economic Studies.
Torsten Persson & Guido Tabellini, .
"Political Economics and Macroeconomic Policy ,"
Working Papers
121, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
[Downloadable!] Persson, Torsten & Tabellini , Guido, 1997.
"Political Economics and Macroeconomic Policy ,"
Seminar Papers
630, Stockholm University, Institute for International Economic Studies.
[Downloadable!] Torsten Persson & Guido Tabellini, 1997.
"Political Economics and Macroeconomic Policy ,"
NBER Working Papers
6329, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Persson, Torsten & Tabellini, Guido, 1999.
"Political economics and macroeconomic policy ,"
Handbook of Macroeconomics ,
in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 22, pages 1397-1482
Elsevier.
[Downloadable!] (restricted) Reid, Bradford G, 1998.
" Endogenous Elections, Electoral Budget Cycles and Canadian Provincial Governments ,"
Public Choice ,
Springer, vol. 97(1-2), pages 35-48, October.
[Downloadable!] (restricted)
Adi Brender & Allan Drazen, 2004.
"Political Budget Cycles in New versus Established Democracies ,"
NBER Working Papers
10539, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions: Eric Borgne & Ben Lockwood, 2006.
"Do Elections Always Motivate Incumbents? Learning vs. Re-Election Concerns ,"
Public Choice ,
Springer, vol. 127(1), pages 41-60, October.
[Downloadable!] (restricted)
Marina Azzimonti Renzo, 2004.
"On the dynamic inefficiency of governments ,"
2004 Meeting Papers
228, Society for Economic Dynamics.
[Downloadable!]
Alesina, Alberto & Roubini, Nouriel, 1992.
"Political Cycles in OECD Economies ,"
Review of Economic Studies ,
Blackwell Publishing, vol. 59(4), pages 663-88, October.
[Downloadable!] (restricted)
Other versions: Daniel Diermeier & Michael Keane & Antonio Merlo, 2002.
"A Political Economy Model of Congressional Careers ,"
PIER Working Paper Archive
04-037, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 01 Sep 2004.
[Downloadable!]
Other versions:
Daniel Diermeier & Michael Keane & Antonio Merlo, 2004.
"A Political Economy Model of Congressional Careers ,"
Discussion Papers
1387, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
[Downloadable!] Daniel Diermeier & Michael Keane & Antonio Merlo, 2005.
"A Political Economy Model of Congressional Careers ,"
American Economic Review ,
American Economic Association, vol. 95(1), pages 347-373, March.
[Downloadable!] (restricted) Spear, Stephen E. & Wang, Cheng, 2005.
"When to fire a CEO: optimal termination in dynamic contracts ,"
Journal of Economic Theory ,
Elsevier, vol. 120(2), pages 239-256, February.
[Downloadable!] (restricted)
Other versions:
Stephen Spear & Cheng Wang, .
"When to Fire a CEO: Optimal Termination in Dynamic Contracts ,"
GSIA Working Papers
2002-E5, Carnegie Mellon University, Tepper School of Business.
[Downloadable!] Spear, Stephen E. & Wang, Cheng, 2004.
"When to Fire a CEO: Optimal Termination in Dynamic Contracts ,"
Staff General Research Papers
11443, Iowa State University, Department of Economics.
Hess, Gregory D & Orphanides, Athanasios, 1995.
"War Politics: An Economic, Rational-Voter Framework ,"
American Economic Review ,
American Economic Association, vol. 85(4), pages 828-46, September.
[Downloadable!] (restricted)
Peltzman, Sam, 1990.
"How Efficient Is the Voting Market? ,"
Journal of Law & Economics ,
University of Chicago Press, vol. 33(1), pages 27-63, April.
Other versions: Shi, Min & Svensson, Jakob, 2002.
"Conditional Political Budget Cycles ,"
CEPR Discussion Papers
3352, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Steven A. Block & Karen E. Ferree & Smita Singh, 2003.
"Multiparty Competition, Founding Elections and Political Business Cycles in Africa ,"
Journal of African Economies ,
Oxford University Press, vol. 12(3), pages 444-468, September.
Alesina, Alberto, 1987.
"Macroeconomic Policy in a Two-Party System as a Repeated Game ,"
The Quarterly Journal of Economics ,
MIT Press, vol. 102(3), pages 651-78, August.
[Downloadable!] (restricted)
Daniel Eisenberg & Jonathan Ketcham, 2004.
"Economic Voting in U.S. Presidential Elections: Who Blames Whom for What ,"
Topics in Economic Analysis & Policy ,
Berkeley Electronic Press, vol. 4(1), pages 1285-1285.
[Downloadable!] (restricted)
Fair, Ray C, 1996.
"Econometrics and Presidential Elections ,"
Journal of Economic Perspectives ,
American Economic Association, vol. 10(3), pages 89-102, Summer.
[Downloadable!] (restricted)
Block, Steven A., 2002.
"Political business cycles, democratization, and economic reform: the case of Africa ,"
Journal of Development Economics ,
Elsevier, vol. 67(1), pages 205-228, February.
[Downloadable!] (restricted)
Holmstrom, Bengt, 1999.
"Managerial Incentive Problems: A Dynamic Perspective ,"
Review of Economic Studies ,
Blackwell Publishing, vol. 66(1), pages 169-82, January.
[Downloadable!] (restricted)
Bengt Holmstrom, 1999.
"Managerial Incentive Problems: A Dynamic Perspective ,"
NBER Working Papers
6875, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Gauti Eggertsson & Eric Le Borgne, 2005.
"The politics of central bank independence: a theory of pandering and learning in government ,"
Staff Reports
205, Federal Reserve Bank of New York.
[Downloadable!]
Oyer, Paul, 2000.
"A Theory of Sales Quotas with Limited Liability and Rent Sharing ,"
Journal of Labor Economics ,
University of Chicago Press, vol. 18(3), pages 405-26, July.
[Downloadable!] (restricted)
Hess, Gregory D. & Orphanides, Athanasios, 2001.
"Economic conditions, elections, and the magnitude of foreign conflicts ,"
Journal of Public Economics ,
Elsevier, vol. 80(1), pages 121-140, April.
[Downloadable!] (restricted)
Gonzalez, Maria de los Angeles, 2002.
"Do Changes in Democracy Affect the Political Budget Cycle? Evidence from Mexico ,"
Review of Development Economics ,
Blackwell Publishing, vol. 6(2), pages 204-24, June.
[Downloadable!] (restricted)
Torsten Persson, 2002.
"Do Political Institutions Shape Economic Policy? ,"
Econometrica ,
Econometric Society, vol. 70(3), pages 883-905, May.
[Downloadable!] (restricted)
Other versions:
Full
references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Allan Drazen & Marcela Eslava, 2006.
"Pork Barrel Cycles ,"
NBER Working Papers
12190, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Access and
download statistics Did you know? You can use convenient plug-ins to search directly IDEAS from your browser.
This page was last updated on 2008-7-7.
This information is provided to you by IDEAS at the Department of Economics , College of Liberal Arts and Sciences , University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics .