Political business cycles at the municipal level
AbstractThe political article tests for rational political business cycles models on an unexplored and large data set of Portuguese municipalities. This data allows for a clean test of the models due to its high level of detail on expenditure items, an exogenous fixed election schedule and the homogeneity of local governments with respect to policy instruments and institutions. Estimation results clearly reveal the opportunistic behaviour of local governments, that in pre-electoral periods, increase expenditure on items highly visible to the electorate such as roads and street construction, in an effort to signal competence and increase their chances of re-election. JEL classification: H72, D72, D78 Keywords: political business cycles, public finance, local governments
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Bibliographic InfoPaper provided by European Regional Science Association in its series ERSA conference papers with number ersa04p427.
Date of creation: Aug 2004
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Other versions of this item:
- H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-11-09 (All new papers)
- NEP-GEO-2005-11-09 (Economic Geography)
- NEP-MAC-2005-11-09 (Macroeconomics)
- NEP-PBE-2005-11-09 (Public Economics)
- NEP-POL-2005-11-09 (Positive Political Economics)
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