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Government weakness and electoral cycles in local public debt: evidence from Flemish municipalities


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  • Geys, Benny


Empirical research on Political Business (and Budget) Cycles is more supportive for electoral cycles in policies than in macro-economic outcomes. But even pre-electoral policy cycles receive no unanimous confirmation. In the present paper, we give credence to recent arguments that this may be due to the disregard for the political, economic and institutional context in which politicians make policy decisions. Specifically, we argue that the level of political fragmentation of the government affects both the need for and possibility to engage in opportunistic policy cycles. An analysis of local public debt data for 296 Flemish municipalities provides empirical support for this contention. -- Ergebnisse empirischer Forschung zum Thema regierungspolitischer und Budgetzyklen unterstützen eher die These, dass es Wahlzyklen in Bezug auf politische Entscheidungen als in Bezug auf makroökonomische Effekte gibt. Dennoch gibt es auch für Politikzyklen in Vor-Wahl-Perioden keine eindeutige Bestätigung. In der vorliegenden Veröffentlichung belegen wir neuere Argumente, die zeigen, dass die Begründung hierfür in der Missachtung des politischen, ökonomischen und institutionellen Kontextes liegt, in dem Politiker politische Entscheidungen treffen. Wir belegen insbesondere, dass der Grad der politischen Zersplitterung der Regierung sowohl den Bedarf nach als auch die Möglichkeit zu opportunistischen Politikzyklen beeinflusst. Eine Analyse von Daten zur kommunalen Verschuldung von 296 flämischen Gemeinden liefert die empirische Untermauerung für diese Behauptung.

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Paper provided by Social Science Research Center Berlin (WZB) in its series Discussion Papers, Research Unit: Market Processes and Governance with number SP II 2006-06.

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Date of creation: 2006
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Handle: RePEc:zbw:wzbmpg:spii200606

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Keywords: Political Budget Cycles; local public debt; political fragmentation; elections; municipalities;

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  1. Tabellini, Guido & Alesina, Alberto, 1990. "A Positive Theory of Fiscal Deficits and Government Debt," Scholarly Articles 3612769, Harvard University Department of Economics.
  2. Alberto Alesina & Guido Tabellini, 1988. "Voting on the Budget Deficit," NBER Working Papers 2759, National Bureau of Economic Research, Inc.
  3. Ashworth, John & Geys, Benny & Heyndels, Bruno, 2006. "Determinants of tax innovation: The case of environmental taxes in Flemish municipalities," European Journal of Political Economy, Elsevier, vol. 22(1), pages 223-247, March.
  4. Per Tovmo & Torberg Falch, 2002. "The flypaper effect and political strength," Economics of Governance, Springer, Springer, vol. 3(2), pages 153-170, 07.
  5. John Ashworth & Benny Geys & Bruno Heyndels, 2005. "Government Weakness and Local Public Debt Development in Flemish Municipalities," International Tax and Public Finance, Springer, Springer, vol. 12(4), pages 395-422, August.
  6. Cukierman, Alex & Meltzer, Allan H, 1986. "A Positive Theory of Discretionary Policy, the Cost of Democratic Government and the Benefits of a Constitution," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 24(3), pages 367-88, July.
  7. Huber, Gerald & Kocher, Martin G. & Sutter, Matthias, 2003. "Government strength, power dispersion in governments and budget deficits in OECD-countries. A voting power approach," Munich Reprints in Economics, University of Munich, Department of Economics 18164, University of Munich, Department of Economics.
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