Political Budget Cycle: Mexican Town Halls Case

JEdgar Alfredo Nande Vazque () and Juan Carlos Martínez ()
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JEdgar Alfredo Nande Vazque: Universidad de Colima.
Juan Carlos Martínez: University of Sonora.

International Journal of Business and Social Research, 2016, vol. 6, issue 8, 31-42

Abstract: In the current economic context, one of the issues of concern is the growth of public spending of municipalities of Mexico and thus increasing public debt. This combines the traditional interest that literature has been devoted to the relationship between economics and politics from the perspective of Political Budget Cycle. The aim of this paper is to analyze the effect of elections in public expenditure management. To this end, a system based on the Generalized Method of Moments (GMM), which uses instrumental variables based on delays and differences of all variables in the model estimator was used. Our findings indicate that there is an expansion of total expenditure, spending on public works and infrastructure and current expenditure contracted work, indicating the preference of politicians for using investment spending to influence voter behavior. The work also notes that citizens value the policies of public expenditure management when making their voting decisions.

Keywords: Elections; political budget cycle; public spending. (search for similar items in EconPapers)
JEL-codes: C53 C81 D72 D73 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:mir:mirbus:v:6:y:2016:i:8:p:31-42

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