Vote buying or (political) business (cycles) as usual?

Toke Aidt, Zareh Asatryan, Lusine Badalyan and Friedrich Heinemann
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Lusine Badalyan: University of Bremen and Jacobs University

No 2015/23, Working Papers from Institut d'Economia de Barcelona (IEB)

Abstract: We study the short-run effect of elections on monetary aggregates in a sample of 85 low and middle income democracies (1975-2009). We find an increase in the growth rate of M1 during election months of about one tenth of a standard deviation. A similar effect can neither be detected in established OECD democracies nor in other months. The effect is larger in democracies with many poor and uneducated voters, and in Sub-Saharan Africa, Latin America, and in East-Asia and the Pacific. We argue that the election month monetary expansion is related to systemic vote buying which requires significant amounts of cash to be disbursed right before elections. The finely timed increase in M1 is consistent with this; is inconsistent with a monetary cycle aimed at creating an election time boom; and it cannot be, fully, accounted for by alternative explanations.

Keywords: Political business cycles; vote buying; monetary economics (search for similar items in EconPapers)
JEL-codes: D72 E51 O10 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2015
New Economics Papers: this item is included in nep-cdm, nep-mac, nep-pol and nep-sea
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Vote Buying or (Political) Business (Cycles) as Usual? (2020)
Working Paper: Vote Buying or (Political) Business (Cycles) as Usual? (2015)
Working Paper: Vote buying or (political) business (cycles) as usual? (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ieb:wpaper:doc2015-23

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