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Political Expenditure Cycle at the Municipal Government Level in Slovakia

Lenka Maličká ()
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Lenka Maličká: Department of Finance, Faculty of Economics, Technical University of Košice, Letná 9, 040 01 Košice, Slovakia

Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 2019, vol. 67, issue 2, 503-513

Abstract: The idea of the political budget cycle impact on the public expenditure volume and structure raises discussion related mainly to the national government level. Political decision‑making at the sub‑national government level emulates certain common tendencies. In the election time, the political incumbent might seek for re‑election. In aim to increase its own chances, it might manipulate the budget (or fiscal) policy and makes changes in the field of expenditure categories. In this paper, the existence of political expenditure cycle at the municipal level of government in Slovakia is investigated. The dynamic panel data model using the Generalized Method of Moments (GMM) system estimator reveals the positive impact of election year variable on per capita municipal expenditure, while the additional pre‑election year variable is insignificant.

Keywords: political cycle; local government; local expenditures; panel data; generalized method of moments (search for similar items in EconPapers)
Date: 2019
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DOI: 10.11118/actaun201967020503

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