Political Budget Cycles in the Context of a Transition Economy: The Case of Albania

Endrit Lami ()
Additional contact information
Endrit Lami: Martin Luther University Halle-Wittenberg

Comparative Economic Studies, 2023, vol. 65, issue 2, No 2, 262 pages

Abstract: Abstract There is growing research on the political budget cycles in transition economies whose institutions, economies and societies differ significantly from those of developed countries. New democracies are more vulnerable to political budget (fiscal) cycles. Most studies focus on policy instruments (e.g. fiscal policies) rather than on macroeconomic outcomes. In this paper, we analyse the political budget/fiscal cycle in Albania, a transition post-communist country. We analyse monthly data on the budget balance (deficit). The findings show a strong difference in deficits during pre- and post-election quarters, which do not appear when econometric analysis is replicated on annually collapsed data. This paper highlights the importance of distinguishing between types of elections according to their outcomes. Electoral competitiveness (heightened incumbents’ fear of elections loss), lower management efficiency, incumbent’s carelessness about the budget situation during the mandate of political rivals and higher corruption can all be associated with elections that yield rotation (change of the party/coalition in power), thus resulting in a higher budget deficit.

Keywords: Political budget cycles; Budget balance (deficit); Transition economies; Election outcomes (search for similar items in EconPapers)
JEL-codes: D72 E62 H26 P16 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1057/s41294-022-00191-6 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:compes:v:65:y:2023:i:2:d:10.1057_s41294-022-00191-6

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/41294/PS2

DOI: 10.1057/s41294-022-00191-6

Access Statistics for this article

Comparative Economic Studies is currently edited by Nauro Campos

More articles in Comparative Economic Studies from Palgrave Macmillan, Association for Comparative Economic Studies Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().