The cyclicality of government foreign-aid expenditure: voter awareness in “good” times and in “bad”

Andrew Abbott () and Philip Jones ()
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Andrew Abbott: Lancaster University
Philip Jones: University of Bath

Public Choice, 2021, vol. 186, issue 1, No 6, 97-117

Abstract: Abstract While it has been argued that the cyclicality of government spending likely depends on the intensities of political pressure to increase expenditure, in economic upturns and downturns, it is important to explore the determinants of changes in the strengths of those pressures. This paper is the first (to our knowledge) to focus on the relevance of systematic changes in voter awareness of government spending. Predictions of the impact of changes in awareness are tested with reference to 23 OECD donor countries’ foreign aid expenditures over the 1999–2015 period. The evidence offers insights into the discretion governments exercise when “fiscal illusion” increases and into the policy implications of systematic changes in voter awareness (in “good” times and in “bad”).

Keywords: Government expenditure; Foreign aid; Fiscal illusion; Voracity effects (search for similar items in EconPapers)
JEL-codes: E62 H50 H60 H70 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s11127-019-00757-6

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