Advanced Search
MyIDEAS: Login to save this paper or follow this series

Does government ideology influence budget composition? Empirical evidence from OECD countries

Contents:

Author Info

  • Niklas Potrafke

    ()
    (Department of Economics, University of Konstanz, Germany)

Abstract

This paper examines whether government ideology has influenced the allocation of public expenditures in OECD countries. I analyze two datasets that report different expenditure categories and cover the time periods 1970-1997 and 1990-2006, respectively. The results suggest that government ideology has had a rather weak influence on the composition of governments’ budgets. Leftist governments, however, increased spending on “Public Services” in the period 1970-1997 and on “Education” in the period 1990-2006. These findings imply, first, that government ideology hardly influenced budgetary affairs in the last decades, and thus, if ideology plays a role at all, it influences non-budgetary affairs. Second, education has become an important expenditure category for leftist parties to signal their political visions to voters belonging to all societal groups.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.wiwi.uni-konstanz.de/workingpaperseries/WP_Potrafke-16-10.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Department of Economics, University of Konstanz in its series Working Paper Series of the Department of Economics, University of Konstanz with number 2010-16.

as in new window
Length: 38 pages
Date of creation: 13 Dec 2010
Date of revision:
Handle: RePEc:knz:dpteco:1016

Contact details of provider:
Postal: D-78457 Konstanz
Phone: +49-7531-88-2566/2565
Fax: +49-7531-88-4135
Web page: http://www.wiwi.uni-konstanz.de/fb
More information through EDIRC

Order Information:
Web: http://www.wiwi.uni-konstanz.de/fb

Related research

Keywords: budget composition; public expenditures; government ideology; partisan politics; education policy; panel data;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

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.:
as in new window
  1. Potrafke, Niklas, 2010. "The growth of public health expenditures in OECD countries: Do government ideology and electoral motives matter?," Munich Reprints in Economics, University of Munich, Department of Economics 19280, University of Munich, Department of Economics.
  2. Sanz, Ismael & Velazquez, Francisco J., 2007. "The role of ageing in the growth of government and social welfare spending in the OECD," European Journal of Political Economy, Elsevier, vol. 23(4), pages 917-931, December.
  3. DE DONDER, Philippe & HINDRIKS, Jean, 2006. "Equilibrium social insurance with policy-motivated parties," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2006033, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  4. Alesina, Alberto, 1987. "Macroeconomic Policy in a Two-party System as a Repeated Game," Scholarly Articles 4552531, Harvard University Department of Economics.
  5. Bjørnskov, Christian & Potrafke, Niklas, 2012. "Political ideology and economic freedom across Canadian provinces," Munich Reprints in Economics, University of Munich, Department of Economics 20277, University of Munich, Department of Economics.
  6. David E. Bloom & David Canning & Rick Mansfield & Michael Moore, 2006. "Demographic Change, Social Security Systems, and Savings," NBER Working Papers 12621, National Bureau of Economic Research, Inc.
  7. Clémence VERGNE, 2006. "Democracy, Elections and Allocation of Public Expenditure in Developing Countries," Working Papers 200608, CERDI.
  8. Drazen, Allan & Eslava, Marcela, 2010. "Electoral manipulation via voter-friendly spending: Theory and evidence," Journal of Development Economics, Elsevier, Elsevier, vol. 92(1), pages 39-52, May.
  9. Kenneth Rogoff & Anne Sibert, 1986. "Elections and Macroeconomic Policy Cycles," NBER Working Papers 1838, National Bureau of Economic Research, Inc.
  10. Newey, Whitney & West, Kenneth, 2014. "A simple, positive semi-definite, heteroscedasticity and autocorrelation consistent covariance matrix," Applied Econometrics, Publishing House "SINERGIA PRESS", Publishing House "SINERGIA PRESS", vol. 33(1), pages 125-132.
  11. R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
  12. Ignacio Lago-Peñas & Santiago Lago-Peñas, 2009. "Does the nationalization of party systems affect the composition of public spending?," Economics of Governance, Springer, Springer, vol. 10(1), pages 85-98, January.
  13. Patrick Laurency & Dirk Schindler, 2010. "Why Green Parties Should Fear Successful International Climate Agreements," TWI Research Paper Series, Thurgauer Wirtschaftsinstitut, Universität Konstanz 56, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
  14. Axel Dreher, 2005. "Does Globalization Affect Growth? Evidence from a new Index of Globalization," TWI Research Paper Series, Thurgauer Wirtschaftsinstitut, Universität Konstanz 6, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
  15. Cremer, Helmuth & De Donder, Philippe & Gahvari, Firouz, 2005. "Political Competition within and between Parties: An Application to Environmental Policy," IDEI Working Papers, Institut d'Économie Industrielle (IDEI), Toulouse 358, Institut d'Économie Industrielle (IDEI), Toulouse.
  16. Axel Dreher & Jan-Egbert Sturm & Heinrich W. Ursprung, 2006. "The impact of globalization on the composition of government expenditures: Evidence from panel data," KOF Working papers, KOF Swiss Economic Institute, ETH Zurich 06-141, KOF Swiss Economic Institute, ETH Zurich.
  17. Kneebone, R.D. & McKenzie, K.J., 1998. "Electoral and Partisan Cycles in Fiscal Policy: an Examination of Canadian Provinces," Papers, Calgary - Department of Economics 98-06, Calgary - Department of Economics.
  18. Konstantinos Angelopoulos & George Economides, . "Fiscal Policy, Rent Seeking and Growth under Electoral Uncertainty Theory and Evidence from the OECD," Working Papers, Business School - Economics, University of Glasgow 2007_28, Business School - Economics, University of Glasgow, revised Apr 2008.
  19. Shelton, Cameron A., 2007. "The size and composition of government expenditure," Journal of Public Economics, Elsevier, Elsevier, vol. 91(11-12), pages 2230-2260, December.
  20. Niklas Potrafke, 2009. "Did globalization restrict partisan politics? An empirical evaluation of social expenditures in a panel of OECD countries," Public Choice, Springer, Springer, vol. 140(1), pages 105-124, July.
  21. Margarita Katsimi & Vassilis Sarantides, 2010. "Do Elections Affect the Composition of Fiscal Policy?," CESifo Working Paper Series 2908, CESifo Group Munich.
  22. Tridimas, George, 2001. " The Economics and Politics of the Structure of Public Expenditure," Public Choice, Springer, Springer, vol. 106(3-4), pages 299-316, March.
  23. Tavares, Jose, 2004. "Does right or left matter? Cabinets, credibility and fiscal adjustments," Journal of Public Economics, Elsevier, Elsevier, vol. 88(12), pages 2447-2468, December.
  24. David Roodman, 2009. "A Note on the Theme of Too Many Instruments," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 135-158, 02.
  25. Niklas Potrafke, 2010. "Does government ideology influence deregulation of product markets? Empirical evidence from OECD countries," Public Choice, Springer, Springer, vol. 143(1), pages 135-155, April.
  26. Nordhaus, William D, 1975. "The Political Business Cycle," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 42(2), pages 169-90, April.
  27. Alt, James E. & Lassen, David Dreyer, 2006. "Fiscal transparency, political parties, and debt in OECD countries," European Economic Review, Elsevier, Elsevier, vol. 50(6), pages 1403-1439, August.
  28. Jac C. Heckelman, 2002. "Variable Rational Partisan Business Cycles: theory and some evidence," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 35(3), pages 568-585, August.
  29. W. J. Henisz, 2000. "The Institutional Environment for Economic Growth," Economics and Politics, Wiley Blackwell, Wiley Blackwell, vol. 12(1), pages 1-31, 03.
  30. Bjørnskov, Christian, 2008. "The growth-inequality association: Government ideology matters," Journal of Development Economics, Elsevier, Elsevier, vol. 87(2), pages 300-308, October.
  31. Sylwester, Kevin, 2002. "Can education expenditures reduce income inequality?," Economics of Education Review, Elsevier, Elsevier, vol. 21(1), pages 43-52, February.
  32. Shi, Min & Svensson, Jakob, 2006. "Political budget cycles: Do they differ across countries and why?," Journal of Public Economics, Elsevier, Elsevier, vol. 90(8-9), pages 1367-1389, September.
  33. Laitner, John, 2007. "Comment on: David Bloom, David Canning, Rick Mansfield, and Michael Moore's "Demographic change, social security systems, and savings"," Journal of Monetary Economics, Elsevier, Elsevier, vol. 54(1), pages 115-117, January.
  34. Julian R. Betts & Darlene Morell, 1999. "The Determinants of Undergraduate Grade Point Average: The Relative Importance of Family Background, High School Resources, and Peer Group Effects," Journal of Human Resources, University of Wisconsin Press, vol. 34(2), pages 268-293.
  35. Niklas Potrafke, 2009. "Does government ideology influence political alignment with the U.S.? An empirical analysis of voting in the UN General Assembly," The Review of International Organizations, Springer, Springer, vol. 4(3), pages 245-268, September.
  36. Niklas Potrafke, 2010. "Ideology and cultural policy," TWI Research Paper Series, Thurgauer Wirtschaftsinstitut, Universität Konstanz 49, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
  37. Niklas Potrafke, 2011. "Public Expenditures on Education and Cultural Affairs in the West German States: Does Government Ideology Influence the Budget Composition?," German Economic Review, Verein für Socialpolitik, Verein für Socialpolitik, vol. 12(1), pages 124-145, 02.
  38. Behr, Andreas, 2003. "A comparison of dynamic panel data estimators: Monte Carlo evidence and an application to the investment function," Discussion Paper Series 1: Economic Studies 2003,05, Deutsche Bundesbank, Research Centre.
  39. Antoninis, M. & Tsakloglou, P., 1997. "On the Distributional Impact of Public Education: Evidence from Greece," DEOS Working Papers 97-01, Athens University of Economics and Business.
  40. Peter Calcagno & Monica Escaleras, 2007. "Party alternation, divided government, and fiscal performance within US States," Economics of Governance, Springer, Springer, vol. 8(2), pages 111-128, February.
  41. Ulrich Oberndorfer & Viktor Steiner, 2007. "Generationen- oder Parteienkonflikt? Eine empirische Analyse der deutschen Hochschulausgaben," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, Verein für Socialpolitik, vol. 8(2), pages 165-183, 03.
  42. Merzyn, Wolfram & Ursprung, Heinrich W., 2005. "Voter support for privatizing education: evidence on self-interest and ideology," European Journal of Political Economy, Elsevier, vol. 21(1), pages 33-58, March.
  43. Roger Congleton & Feler Bose, 2010. "The rise of the modern welfare state, ideology, institutions and income security: analysis and evidence," Public Choice, Springer, Springer, vol. 144(3), pages 535-555, September.
  44. Kåre Johansen & Ørjan Mydland & Bjarne Strøm, 2006. "Politics in Wage setting: Does government colour matter?," Working Paper Series, Department of Economics, Norwegian University of Science and Technology 6506, Department of Economics, Norwegian University of Science and Technology.
  45. Niklas Potrafke, 2012. "Political cycles and economic performance in OECD countries: empirical evidence from 1951–2006," Public Choice, Springer, Springer, vol. 150(1), pages 155-179, January.
  46. Felix Bierbrauer, 2009. "Optimal Income Taxation and Public Good Provision with Endogenous Interest Groups," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(2), pages 311-342, 04.
  47. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  48. Cameron A. Shelton, 2007. "The Size and Composition of Government Expenditure," Wesleyan Economics Working Papers, Wesleyan University, Department of Economics 2007-002, Wesleyan University, Department of Economics.
  49. Christian Bjørnskov & Niklas Potrafke, 2011. "Politics and privatization in Central and Eastern Europe," The Economics of Transition, The European Bank for Reconstruction and Development, The European Bank for Reconstruction and Development, vol. 19(2), pages 201-230, 04.
  50. Gemmell, Norman & Kneller, Richard & Sanz, Ismael, 2008. "Foreign investment, international trade and the size and structure of public expenditures," European Journal of Political Economy, Elsevier, vol. 24(1), pages 151-171, March.
  51. José Bercoff & Osvaldo Meloni, 2009. "Federal budget allocation in an emergent democracy: evidence from Argentina," Economics of Governance, Springer, Springer, vol. 10(1), pages 65-83, January.
  52. Tetsuo Ono, 2009. "The political economy of environmental and social security policies: the role of environmental lobbying," Economics of Governance, Springer, Springer, vol. 10(3), pages 261-296, July.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Viktor Brech & Niklas Potrafke, 2013. "Donor Ideology and Types of Foreign Aid," CESifo Working Paper Series 4314, CESifo Group Munich.
  2. Björn Kauder & Niklas Potrafke, 2013. "Government Ideology and Tuition Fee Policy: Evidence from the German States," CESifo Working Paper Series 4205, CESifo Group Munich.
  3. Enkelmann, Sören & Leibrecht, Markus, 2013. "Political expenditure cycles and election outcomes: Evidence from disaggregation of public expenditures by economic functions," Economics Letters, Elsevier, Elsevier, vol. 121(1), pages 128-132.
  4. Niklas Potrafke, 2013. "Evidence on the Political Principal-Agent Problem from Voting on Public Finance for Concert Halls," CESifo Working Paper Series 4306, CESifo Group Munich.
  5. Björn Kauder & Niklas Potrafke, 2013. "Regierungsideologie und Studiengebühren in den deutschen Bundesländern," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 66(10), pages 19-24, 05.
  6. Patrick Laurency & Dirk Schindler, 2011. "International Climate Agreements, Cost Reductions and Convergence of Partisan Politics," CESifo Working Paper Series 3591, CESifo Group Munich.
  7. Andreas Fuchs & Axel Dreher & Peter Nunnenkamp, 2012. "Determinants of Donor Generosity: A Survey of the Aid Budget Literature," Kiel Working Papers 1789, Kiel Institute for the World Economy.
  8. Agnese Sacchi & Simone Salotti, 2012. "A comprehensive anlysis of expenditure decentralization and of the composition of local public spending," Departmental Working Papers of Economics - University 'Roma Tre' 0155, Department of Economics - University Roma Tre.
  9. Jeroen Klomp & Jakob de Haan, 2013. "Conditional Election and Partisan Cycles in Government Support to the Agricultural Sector: An Empirical Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 95(4), pages 793-818.
  10. Kaushik, Arun & Rupayan Pal, 2012. "Political strongholds and budget allocation for developmental expenditure: Evidence from Indian states, 1971-2005," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2012-015, Indira Gandhi Institute of Development Research, Mumbai, India.
  11. Angelopoulos, Konstantinos & Economides, George & Kammas, Pantelis, 2012. "Does cabinet ideology matter for the structure of tax policies?," European Journal of Political Economy, Elsevier, vol. 28(4), pages 620-635.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:knz:dpteco:1016. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gundula Hadjiani).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.