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Political Leaders Socioeconomic Background and Public Budget Deficits: Evidence from OECD Countries

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  • Bernd Hayo

    ()
    (University of Marburg)

  • Florian Neumeier

    ()
    (University of Marburg)

Abstract

This paper empirically analyses the relationship between political leaders socioeconomic backgrounds and public budget deficits utilising panel data on 21 OECD countries from 1980 to 2008. Building on sociological, as well as economic, research, we argue that the socioeconomic status of political decision-makers, i.e., presidents or prime ministers, is an important determinant of fiscal budget decisions. Our theory-consistent findings show that the tenures of lower-class leaders i.e., leaders of low socioeconomic status are associated with a deficit-to-GDP ratio which is 1.6 percentage points higher than that during tenures of upperclass leaders.

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File URL: http://www.uni-marburg.de/fb02/makro/forschung/magkspapers/08-2013_hayo.pdf
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Bibliographic Info

Paper provided by Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung) in its series MAGKS Papers on Economics with number 201308.

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Length: 39 pages
Date of creation: 2013
Date of revision:
Publication status: Forthcoming in
Handle: RePEc:mar:magkse:201308

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Keywords: Budget deficit; political leaders; socioeconomic status; time preference.;

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