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Overlapping political budget cycles

Author

Listed:
  • Dirk Foremny

    (University of Barcelona)

  • Ronny Freier

    (Technical University of Applied Sciences Wildau
    German Institute for Economic Research (DIW Berlin))

  • Marc-Daniel Moessinger

    (Centre for European Economic Research (ZEW Mannheim))

  • Mustafa Yeter

    () (German Council of Economic Experts)

Abstract

Abstract We advance the literature on political budget cycles by testing for cycles in expenditures for elections to the legislative and the executive branches. Using municipal data, we identify cycles independently for the two branches, evaluate the effects of overlaps, and account for general year effects. We find sizable effects on expenditures before legislative elections and even larger effects before joint elections to the legislature and the office of mayor. In the case of coincident elections, we show that it is important whether the incumbent chief executive seeks reelection. To account for the potential endogeneity of that decision, we apply an IV approach using age and pension eligibility rules.

Suggested Citation

  • Dirk Foremny & Ronny Freier & Marc-Daniel Moessinger & Mustafa Yeter, 2018. "Overlapping political budget cycles," Public Choice, Springer, vol. 177(1), pages 1-27, October.
  • Handle: RePEc:kap:pubcho:v:177:y:2018:i:1:d:10.1007_s11127-018-0582-9
    DOI: 10.1007/s11127-018-0582-9
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    Cited by:

    1. Feld, Lars P., 2018. "The quest for fiscal rules," Freiburg Discussion Papers on Constitutional Economics 18/09, Walter Eucken Institut e.V..
    2. Manuela Krause, 2019. "Communal fees and election cycles: Evidence from German municipalities," ifo Working Paper Series 293, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.

    More about this item

    Keywords

    Election cycles; Municipal expenditures; Legislative and executive elections; Instrumental variables approach;

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H74 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Borrowing

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