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The political business cycle in Colombia on the National and Regional level


  • Allan DRAZEN


  • Marcela ESLAVA



The plan of this report is the following. In the next section we present a conceptual background, reviewing the basic opportunistic political business cycle, the problems with monetary theories, and the theory and evidence supporting the existence of a political fiscal cycle. In section 3, we describe the data and the basic format of the empirical tests. As indicated above, a major contribution of this study is both the collection of regional and local data and novel use of these data to test for policy effects of elections. In section 4 we discuss the empirical results at the national level. In section 5 we consider the results for fiscal variables at the regional (state and city) level. A key result of these sections is the effect of elections on investment spending prior to the election. We look at the effects of both national and regional elections on regional level data, giving special emphasis to the question of whether the regional results reflect a response to national elections or to regional elections themselves. In these two sections we also examine more closely some of the more surprising results. The final section contains a summary and conclusions.

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  • Allan DRAZEN & Marcela ESLAVA, 2003. "The political business cycle in Colombia on the National and Regional level," Archivos de Economía 003616, Departamento Nacional de Planeación.
  • Handle: RePEc:col:000118:003616

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    References listed on IDEAS

    1. Javier A. Birchenall, 2007. "Income distribution and macroeconomics in Colombia," Journal of Income Distribution, Ad libros publications inc., vol. 16(2), pages 6-24, June.
    2. Ortega, Juan Ricardo & Piraquive, Gabriel Armando & Hernandez, Gustavo Adolfo & Soto, Carolina & Prada, Sergio & Ramirez, Juan Mauricio, 2000. "Incidencia fiscal de los incentivos tributarios
      [Fiscal Incidence of tax incentives]
      ," MPRA Paper 14016, University Library of Munich, Germany.
    3. Thomas F. RUTHERFORD & Miles K. LIGHT & Gustavo Adolfo HERNANDEZ, 2002. "A dynamic general equilibrium model for tax policy analysis in Colombia," Archivos de Economía 001910, Departamento Nacional de Planeación.
    4. Francisco Javier Lasso, 2003. "Economías de escala en los hogares y la pobreza," Revista de Economía del Rosario, Universidad del Rosario, June.
    5. Thomas F. Rutherford & Miles K. LIGHT, 2002. "A General Equilibrium Model for Tax Policy Analysis in Colombia: The MEGATAX Model," Archivos de Economía 011291, Departamento Nacional de Planeación.
    6. Castro Carlos Alberto, 2001. "Eficiencia-X en el sector bancario colombiano," Revista Desarrollo y Sociedad, Universidad de los Andes - CEDE, September.
    7. Juan Carlos ECHEVERRY GARZON, 2002. "El siglo del modelo de desarrollo," Archivos de Economía 002552, Departamento Nacional de Planeación.
    8. Fernando MESA PARRA, 2001. "Strategic Trade Policy and Exchange Rate Uncertainty," Archivos de Economía 003527, Departamento Nacional de Planeación.
    9. Hernandez, Gustavo Adolfo & Light, Miles & Rutherford, Thomas, 2002. "A dynamic general equilibrium model for tax policy analysis in Colombia," MPRA Paper 28435, University Library of Munich, Germany.
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    Cited by:

    1. Néstor Rubiano Páez, 2011. "Ciclo político de los negocios y tamaño municipal: Colombia 1989-2008," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 13(25), pages 105-136, July-Dece.
    2. Víctor Acxel Amarillas Urbina & Cesáreo Gámez Garza & Marlen R. Reyes Hernández, 2016. "The Presidential Transition and Economic Activity in Mexico, 1994-2013. La transición presidencial y la actividad económica en México, 1994-2013," Economia Coyuntural,Revista de temas de perspectivas y coyuntura, Instituto de Investigaciones Economicas y Sociales 'Jose Ortiz Mercado' (IIES-JOM), Facultad de Ciencias Economicas, Administrativas y Financieras, Universidad Autonoma Gabriel Rene Moreno, vol. 1(4), pages 61-99.

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