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Political Business Cycles and Fiscal Policies in Developing Countries


  • Schuknecht, Ludger


This paper empirically studies fiscal policies around elections in thirty-five developing countries. It finds that governments try to improve their reelection prospects with the help of expansionary fiscal policies. Rising fiscal deficits before elections are followed by fiscal consolidation afterwards. These cycles can be found particularly in countries which are less trade oriented. Certain IMF-supported programs contribute to fiscal stabilization. Copyright 1996 by WWZ and Helbing & Lichtenhahn Verlag AG

Suggested Citation

  • Schuknecht, Ludger, 1996. "Political Business Cycles and Fiscal Policies in Developing Countries," Kyklos, Wiley Blackwell, vol. 49(2), pages 155-170.
  • Handle: RePEc:bla:kyklos:v:49:y:1996:i:2:p:155-70

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    References listed on IDEAS

    1. Shang-Jin Wei, 1997. "Why is Corruption So Much More Taxing Than Tax? Arbitrariness Kills," NBER Working Papers 6255, National Bureau of Economic Research, Inc.
    2. Todd J. Moss & Vijaya Ramachandran & Manju Kedia Shah, 2004. "Is Africa’s Skepticism of Foreign Capital Justified? Evidence from East African Firm Survey Data," Working Papers 41, Center for Global Development.
    3. Torsten Persson & Gerard Roland & Guido Tabellini, 2003. "How Do Electoral Rules Shape Party Structures, Government Coalitions and Economic Policies?," Working Papers 251, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    4. Drusilla K. Brown & Alan V. Deardorff & Robert M. Stern, 2009. "The Effects of Multinational Production on Wages and Working Conditions in Developing Countries," World Scientific Book Chapters,in: Globalization And International Trade Policies, chapter 17, pages 623-687 World Scientific Publishing Co. Pte. Ltd..
    5. Shang-Jin Wei, 2000. "How Taxing is Corruption on International Investors?," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 1-11, February.
    6. Dani Rodrik, 1997. "Has Globalization Gone Too Far?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 57.
    7. Edward M. Graham, 2000. "Fighting the Wrong Enemy: Antiglobal Activists and Multinational Enterprises," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 91.
    8. Tomz, Michael & Wittenberg, Jason & King, Gary, 2003. "Clarify: Software for Interpreting and Presenting Statistical Results," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 8(i01).
    9. Jagdish N. Bhagwati, 2004. "In Defense of Globalization: It Has a Human Face," Rivista di Politica Economica, SIPI Spa, vol. 94(6), pages 9-20, November-.
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