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Are there political fiscal cycles in NMS?


  • STANOVA, Nadja


It is a generally documented fact that political cycles are a phenomenon of new democracies. In this paper we deepen the evidence for the new EU member countries that are a prominent example of recently established democratic systems. We show that, in line with the opportunistic theory, primary balances tended to deteriorate in the years of elections, if taking NMS ’en bloc’. This was mainly driven by the cycle in government expenditures. However, careful cross-country and cross-time analysis challenges the general view. It turns out that the political cycle cannot be attributed to all new European democracies, in particular, not to those that made long-run attempts to integrate into EMU. Moreover, we document that with the time passing, opportunism has evaporated from the overall sample of the NMS. This comes from the fact that the political cycle has diminished in countries that were prone to opportunistic manipulation in the initial period.

Suggested Citation

  • STANOVA, Nadja, 2009. "Are there political fiscal cycles in NMS?," Working Papers 2009013, University of Antwerp, Faculty of Applied Economics.
  • Handle: RePEc:ant:wpaper:2009013

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    References listed on IDEAS

    1. Tam Yeuk-Mui May, 2002. "Organizational And Occupational Commitment: Knowledge Workers In Large Corporations," Journal of Management Studies, Wiley Blackwell, vol. 39(6), pages 775-801, September.
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    More about this item


    Fiscal policy; Opportunistic cycle; Business cycle; Government expenditures; NMS; CEE countries;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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