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Political Effects on the Allocation of Public Expenditures: Empirical Evidence from OECD Countries

  • Niklas Potrafke

This paper examines the effects of political determinants on the allocation of public expenditures. Analyzing an OECD panel from 1990 to 2004, a SURE model controls for the contemporaneous correlation between the different expenditure categories (COFOG). I find that left governments set other priorities than right governments: In particular, they increase spending for "Environment protection", "Recreation; Culture and Religion" and "Education". The number of coalition partners as well as minority governments affects the allocation of public expenditures, too. In contrast, there are no election and pre-election year effects.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.55650.de/dp653.pdf
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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 653.

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Length: 21 p.
Date of creation: 2006
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Handle: RePEc:diw:diwwpp:dp653
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