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Does government ideology influence budget composition? Empirical evidence from OECD countries

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  • Potrafke, Niklas

Abstract

This paper examines whether government ideology has influenced the allocation of public expenditures in OECD countries. I analyze two datasets that report different expenditure categories and cover the time periods 1970-1997 and 1990-2006, respectively. The results suggest that government ideology has had a rather weak influence on the composition of governments’ budgets. Leftist governments, however, increased spending on \"Public Services\" in the period 1970-1997 and on \"Education\" in the period 1990-2006. These findings imply, first, that government ideology hardly influenced budgetary affairs in the last decades, and thus, if ideology plays a role at all, it influences non-budgetary affairs. Second, education has become an important expenditure category for leftist parties to signal their political visions to voters belonging to all societal groups.

Suggested Citation

  • Potrafke, Niklas, 2011. "Does government ideology influence budget composition? Empirical evidence from OECD countries," Munich Reprints in Economics 19278, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:19278
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    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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