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A theory of political cycles

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  • Leonardo Martinez

Abstract

We study how the proximity of elections affects policy choices in a model in which policymakers want to improve their reputation to increase their reelection chances. Policymakers' equilibrium decisions depend on both their reputation and the proximity of the next election. Typically, incentives to influence election results are stronger closer to the election (for a given reputation level), as argued in the political cycles literature, and these political cycles are less important when the policymaker's reputation is better. Our analysis sheds light on other agency relationships in which part of the compensation is decided upon infrequently.

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Paper provided by Federal Reserve Bank of Richmond in its series Working Paper with number 05-04.

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Date of creation: 2008
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Handle: RePEc:fip:fedrwp:05-04

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Keywords: Political science;

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Citations

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Cited by:
  1. Marina Azzimonti, 2013. "The dynamics of public investment under persistent electoral advantage," Working Papers 13-43, Federal Reserve Bank of Philadelphia.
  2. Braz Camargo, 2011. "Career Concerns: A Human Capital Perspective," 2011 Meeting Papers 1274, Society for Economic Dynamics.
  3. César Martinelli & John Duggan, 2014. "The Political Economy of Dynamic Elections: A Survey and Some New Results," Working Papers 1403, Centro de Investigacion Economica, ITAM.
  4. Allan Drazen & Marcela Eslava, 2006. "Pork Barrel Cycles," NBER Working Papers 12190, National Bureau of Economic Research, Inc.
  5. Leonardo Martinez, 2009. "Why could political incentives be different during election times?," Economic Quarterly, Federal Reserve Bank of Richmond, issue Sum, pages 315-334.
  6. Jacek Rothert, 2009. "Monitoring, Moral Hazard and Turnover," Department of Economics Working Papers 130124, The University of Texas at Austin, Department of Economics, revised Sep 2012.
  7. Dmitriy Vorobyev, 2010. "Growth of Electoral Fraud in Non-Democracies: The Role of Uncertainty," CERGE-EI Working Papers wp420, The Center for Economic Research and Graduate Education - Economic Institute, Prague.

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