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Does the expectation or realization of a federal election precipitate Canadian output growth?

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  • J. Stephen Ferris
  • Marcel‐Cristian Voia

Abstract

This paper asks whether Canadian data is consistent with the predicted effects of political opportunism, partisanship, and political competition on real output growth since Confederation. Using annual data from 1870 to 2005 we find new support for an opportunistic electoral cycle in Canadian data but only if the actual election date used in most studies is replaced by an estimate of the incumbent governing party's subjectively held likelihood of an election arising. In our case the estimate is generated from a Cox‐proportional hazard model. The paper explores in detail the issues raised by using a generated regressor to approximate a subjectively held expectation versus an observable proxy and argues that these conditions are met in our case. Finally we also find evidence consistent with partisan cycles in the data but much less evidence consistent with the hypothesis that changes in the degree of political competition have affected real output growth. Ce mémoire se demande si les données canadiennes sont consistantes avec les effets prévus de l’opportunisme politique, de la partisanerie et de la concurrence politique sur le produit réel canadien depuis la Confédération. En utilisant des données annuelles entre 1870 et 2005, on découvre un support nouveau pour l’idée d’une cycle électoral opportuniste dans les données canadiennes, mais seulement si la date effective des élections (utilisée dans la plupart des études) est remplacée par une estimation de la probabilité subjective du parti au pouvoir qu’une élection se tiendra. Dans ce cas, l’estimation est générée à partir d’un modèle de hasard proportionnel à la Cox. Le mémoire explore en détails les problèmes soulevés par l’utilisation d’une régression de cette sorte pour approximer l’anticipation versus l’utilisation d’un indicateur observable, et suggère que les conditions nécessaires pour que ce soit acceptable sont présentes dans ce cas‐ci. Finalement, les résultats sont consistants avec des cycles de partisannerie dans les données, mais il y a un support beaucoup moins ferme pour les hypothèses que les changements dans le degré de concurrence politique ont affecté la croissance réelle du produit.

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  • J. Stephen Ferris & Marcel‐Cristian Voia, 2011. "Does the expectation or realization of a federal election precipitate Canadian output growth?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 44(1), pages 107-132, February.
    • Handle: RePEc:wly:canjec:v:44:y:2011:i:1:p:107-132
    DOI: 10.1111/j.1540-5982.2010.01625.x
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    Cited by:

    1. Mario Mechtel & Niklas Potrafke, 2013. "Electoral cycles in active labor market policies," Public Choice, Springer, vol. 156(1), pages 181-194, July.
    2. J. Stephen Ferris & Derek E. H. Olmstead, 2012. "Fixed versus Flexible Election Cycles: Explaining innovation in the timing of Canada’s Election Cycle," Carleton Economic Papers 12-04, Carleton University, Department of Economics, revised 01 Dec 2016.
    3. Christian Bjørnskov & Niklas Potrafke, 2013. "The size and scope of government in the US states: does party ideology matter?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(4), pages 687-714, August.
    4. J. Stephen Ferris & Derek E. H. Olmstead, 2017. "Fixed versus flexible election terms: explaining innovation in the timing of Canada’s election cycle," Constitutional Political Economy, Springer, vol. 28(2), pages 117-141, June.
    5. Niklas Potrafke, 2012. "Political cycles and economic performance in OECD countries: empirical evidence from 1951–2006," Public Choice, Springer, vol. 150(1), pages 155-179, January.
    6. J. Stephen Ferris & Marcel-Christian Voia, 2019. "Elections, Economic Outcomes and Policy in Canada: 1870 - 2015," Carleton Economic Papers 19-11, Carleton University, Department of Economics.
    7. J. Stephen Ferris & Marcel-Cristian Voia, 2021. "Elections, economic outcomes and policy choices in Canada: 1870 – 2015," Applied Economics, Taylor & Francis Journals, vol. 53(16), pages 1840-1855, April.
    8. Voia, Marcel-Cristian & Ferris, J. Stephen, 2013. "Do business cycle peaks predict election calls in Canada?," European Journal of Political Economy, Elsevier, vol. 29(C), pages 102-118.
    9. J. Stephen Ferris, 2010. "Fiscal Policy from a Public Choice Perspective," Carleton Economic Papers 10-10, Carleton University, Department of Economics.
    10. Mechtel, Mario & Potrafke, Niklas, 2009. "Political Cycles in Active Labor Market Policies," MPRA Paper 14270, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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