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

  • Potrafke, Niklas

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.

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Paper provided by University of Munich, Department of Economics in its series Munich Reprints in Economics with number 19278.

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Date of creation: 2011
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Publication status: Published in Economics of Governance 2 12(2011): pp. 101-134
Handle: RePEc:lmu:muenar:19278
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