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Opportunistic Political Cycles: Test in a Young Democracy Setting

Author

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  • Akhmedov, Akhmed
  • Ravitchev, Alexei
  • Zhuravskaya, Ekaterina

Abstract

Despite the fact that theoretical research on opportunistic political cycles is very intuitive and well developed, empirical literature has found fairly weak evidence of opportunistic political cycles. This Paper tests the theory in a decade-old democracy – Russia. We find strong evidence of very short opportunistic political cycles and provide evidence and explanation why many previous attempts to find evidence failed. Using a comprehensive list of Russia's regional elections and regional monthly panel data between 1996 and 2001, we find that: (1) opportunistic political cycles in regional fiscal policies are sizable and short-lived on average; (2) the magnitude of opportunistic cycles decreases with voters' rationality and awareness (measured by urbanization, computerization, education, and freedom of media); (3) there is a learning curve for voters: cycles become smaller with time; (4) cycles in fiscal policies increase political popularity and the re-election chances of incumbent governors. Our results confirm that maturity of democracy as well as rationality and awareness of the electorate are very important factors in determination of the scope for opportunistic cycles.

Suggested Citation

  • Akhmedov, Akhmed & Ravitchev, Alexei & Zhuravskaya, Ekaterina, 2003. "Opportunistic Political Cycles: Test in a Young Democracy Setting," CEPR Discussion Papers 3855, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:3855
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    Cited by:

    1. repec:eee:macchp:v2-2599 is not listed on IDEAS
    2. Allan Drazen & Peter Isard, 2004. "Can Public Discussion Enhance Program Ownership?," NBER Working Papers 10927, National Bureau of Economic Research, Inc.
    3. Alberto Alesina & Andrea Passalacqua, 2015. "The Political Economy of Government Debt," NBER Working Papers 21821, National Bureau of Economic Research, Inc.
    4. Peter Isard & Allan Drazen, 2004. "Can Public Discussion Enhance Program Ownership?," IMF Working Papers 04/163, International Monetary Fund.
    5. Akhmedov Akhmed & Orlov Evgeniy, 2004. "Can Government Paternalism Prevent Credit Market Failure?," EERC Working Paper Series 04-02e, EERC Research Network, Russia and CIS.
    6. Ponomareva, Maria & Zhuravskaya, Ekaterina, 2004. "Federal Tax Arrears in Russia: Liquidity Problems, Federal Redistribution or Russian Resistance?," CEPR Discussion Papers 4267, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    fiscal policy; maturity of democracy; opportunistic political business cycles; rationality; russia;

    JEL classification:

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

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