Administrative overspending in Indonesian districts: The role of local politics
AbstractWe study political business cycles (PBC) in newly democratized and decentralized Indonesia at the local level. As the timing of indirect and later on direct elections of district heads differs exogenously across jurisdictions, the political business cycle effect is clearly identified. Our data allow distinguishing PBCs for indirect and direct elections. We find significant budget cycles for discretionary budget categories at the disposal of the district head (not for the overall budget) only for direct elections, not for indirect elections. These cycles are much larger if the incumbent runs for reelection. Our results underline the conditional nature of PBC.
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Bibliographic InfoPaper provided by Department of International Economic Policy, University of Freiburg in its series Discussion Paper Series with number 23.
Length: 9 pages
Date of creation: Apr 2013
Date of revision: Apr 2013
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Political business cycles; Indonesia; local elections; direct and indirect elections;
Find related papers by JEL classification:
- H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
- H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-04-13 (All new papers)
- NEP-POL-2013-04-13 (Positive Political Economics)
- NEP-SEA-2013-04-13 (South East Asia)
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