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Opportunistic Political Cycles: Test in a Young Democracy Setting

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  • Akhmed Akhmedov

    (CEFIR)

  • Ekaterina Zhuravskaya

    (Institute for Advanced Study, Princeton; CEFIR; and CEPR)

Abstract

This paper tests the theory of opportunistic cycles in a decade-old democracy, Russia, finds strong evidence of cycles, and provides explanation for why previous literature often found weaker evidence. Using the comprehensive list of Russia's regional elections and regional monthly panel data between 1996 and 2003, we find that: (1) budget cycle is very sizable and short-lived: large expansion and contraction in fiscal spending occur within two months of elections on both sides; (2) the magnitude of the cycle decreases with government transparency, level of regional democracy, and voter awareness; (3) cycle becomes smaller over time; (4) pre-electoral manipulation increases incumbents’ chances for re-election. The results confirm theoretical findings that maturity of democracy, transparency, and voter awareness are important in determining the scope for opportunistic cycles. The short length of the cycle explains underestimation of its size by previous literature because of low frequency data used.

Suggested Citation

  • Akhmed Akhmedov & Ekaterina Zhuravskaya, 2003. "Opportunistic Political Cycles: Test in a Young Democracy Setting," Working Papers w0024, Center for Economic and Financial Research (CEFIR).
  • Handle: RePEc:cfr:cefirw:w0024
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    More about this item

    Keywords

    Opportunistic political cycles; Maturity of democracy; Russia; Fiscal policy; Government transparency;
    All these keywords.

    JEL classification:

    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • P35 - Economic Systems - - Socialist Institutions and Their Transitions - - - Public Finance
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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