Political pressure and procyclical expenditure: An analysis of the expenditures of state governments in Mexico

Andrew Abbott, Rene Cabral (), Philip Jones and Roberto Palacios

European Journal of Political Economy, 2015, vol. 37, issue C, 195-206

Abstract: Government expenditures are procyclical if they increase in periods of economic growth and decrease in periods of economic downturn. This paper tests the proposition that (within federations) political pressures for public expenditure increase the likelihood that expenditures and intergovernmental transfers will be procyclical. An analysis of political pressures in Mexico suggests that political pressures will produce a distinct pattern of procyclical expenditures across fiscal tiers and across government budgets. This prediction is tested with reference to the expenditures of 31 states in Mexico between 2005 and 2010.

Keywords: Business cycles; Fiscal policy; Voracity effects; Mexico; Latin-America (search for similar items in EconPapers)
JEL-codes: H30 H70 H77 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:37:y:2015:i:c:p:195-206

DOI: 10.1016/j.ejpoleco.2014.12.001

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