Political budget cycles and election outcomes

Jeroen Klomp and Jakob Haan ()

Public Choice, 2013, vol. 157, issue 1, 245-267

Abstract: This paper addresses two empirical questions. Is fiscal policy affected by upcoming elections? If so, do election-motivated fiscal policies enhance the probability of re-election of the incumbent? Employing data for 65 democratic countries over 1975–2005 in a semi-pooled panel model, we find that in most countries fiscal policy is hardly affected by elections. The countries for which we find a significant political budget cycle are very diverse. They include ‘young’ democracies but also ‘established’ democracies. In countries with a political budget cycle, election-motivated fiscal policies have a significant positive (but fairly small) effect on the electoral support for the political parties in government. Copyright The Author(s) 2013

Keywords: Election outcomes; Political budget cycles; Multilevel model; E62; H62 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (70)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:pubcho:v:157:y:2013:i:1:p:245-267

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DOI: 10.1007/s11127-012-9943-y

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