Political Budget Cycles in Papua New Guinea
AbstractThis paper assesses the presence of opportunistic electoral budget cycles in Papua New Guinea. Using quarterly time series data, a clear pattern emerges of pre-election manipulations of fiscal policy by incumbent governments, mainly in the form of increased development spending and overall primary expenditure, followed in some cases by retrenchment in post-election periods. These findings are consistent with the predictions of rational opportunistic political business cycle theory. It is noteworthy that revenue was not statistically significantly related to elections, either in the pre- or post-election period. In this regard, electoral swings in fiscal deficits reflect a preference for influencing expenditures rather than taxation.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 07/219.
Date of creation: 01 Sep 2007
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-11-03 (All new papers)
- NEP-CDM-2007-11-03 (Collective Decision-Making)
- NEP-DEV-2007-11-03 (Development)
- NEP-MAC-2007-11-03 (Macroeconomics)
- NEP-POL-2007-11-03 (Positive Political Economics)
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