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Electoral and Partisan Cycles in Fiscal Policy: An Examination of Canadian Provinces

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  • Ronald Kneebone

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  • Kenneth McKenzie

    ()

Abstract

This paper examines the fiscal policy choices of Canadian provincial governments in the context of partisan and opportunistic cycles. We identify an electoral cycle in which the predilection of provincial governments of all political stripes to increase taxes is temporarily halted in election years. Opportunistic responses in spending are also present. Spending in highly visible areas (schools, roads and hockey rinks) tends to increase in election years. Partisan responses are largely absent from revenues but appear more frequently in program spending choices. Thus, Canadian political parties tend to favour differentiating amongst themselves via their spending, as opposed to their revenue, choices. Copyright Kluwer Academic Publishers 2001

Suggested Citation

  • Ronald Kneebone & Kenneth McKenzie, 2001. "Electoral and Partisan Cycles in Fiscal Policy: An Examination of Canadian Provinces," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 8(5), pages 753-774, November.
  • Handle: RePEc:kap:itaxpf:v:8:y:2001:i:5:p:753-774
    DOI: 10.1023/A:1012895211073
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    References listed on IDEAS

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    1. Alberto Alesina & Gerald D. Cohen & Nouriel Roubini, 1991. "Macroeconomic Policy and Elections in OECD Democracies," NBER Working Papers 3830, National Bureau of Economic Research, Inc.
    2. Roubini, Nouriel & Sachs, Jeffrey D., 1989. "Political and economic determinants of budget deficits in the industrial democracies," European Economic Review, Elsevier, vol. 33(5), pages 903-933, May.
    3. Alberto Alesina & Gerald D. Cohen & Nouriel Roubini, 1992. "Macroeconomic Policy And Elections In Oecd Democracies," Economics and Politics, Wiley Blackwell, vol. 4(1), pages 1-30, March.
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    5. L. Wade, 1988. "Review," Public Choice, Springer, vol. 58(1), pages 99-100, July.
    6. Kenneth Rogoff & Anne Sibert, 1988. "Elections and Macroeconomic Policy Cycles," Review of Economic Studies, Oxford University Press, vol. 55(1), pages 1-16.
    7. Lindbeck, Assar, 1976. "Stabilization Policy in Open Economies with Endogenous Politicians," American Economic Review, American Economic Association, vol. 66(2), pages 1-19, May.
    8. Alberto Alesina & Nouriel Roubini & Gerald D. Cohen, 1997. "Political Cycles and the Macroeconomy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262510944, November.
    9. Rogoff, Kenneth, 1990. "Equilibrium Political Budget Cycles," American Economic Review, American Economic Association, vol. 80(1), pages 21-36, March.
    10. Cohen, Gerald & Alesina, Alberto & Roubini, Nouriel, 1992. "Macroeconomic Policy and Elections in OECD Democracies," Scholarly Articles 4553023, Harvard University Department of Economics.
    11. William D. Nordhaus, 1975. "The Political Business Cycle," Review of Economic Studies, Oxford University Press, vol. 42(2), pages 169-190.
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    More about this item

    Keywords

    political economy; partisan and opportunistic effects;

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General

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