Pakistan, Politics and Political Business Cycles
Gernot Sieg () and
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Irem Batool: COMSATS Institute of Information Technology, Sahiwal
The Pakistan Development Review, 2012, vol. 51, issue 2, 153-166
This paper studies whether in Pakistan the dynamic behaviour of unemployment, inflation, budget deficit and real GDP growth is systematically affected by the timing of elections. We cover the period from 1973-2009. Our results can be summarised as follows: (1) Unemployment tends to be lower in pre-election periods and tends to increase immediately after elections, perhaps as a result of politically motivated employment schemes. (2) Inflation tends to be lower in pre-election periods, perhaps as a result of pre-electoral price regulation. (3) We find increase in the governmental budget deficit, financed by heavy government borrowings from the central bank and banking sector during election year. (4) Real GDP growth and real governmental investment growth declines during pre and post election terms possibly as a result of inefficient resource allocation.
Keywords: Opportunistic Political Business Cycle; Fiscal Policy; Macro-economics; Elections; Pakistan (search for similar items in EconPapers)
JEL-codes: D72 D78 H50 H61 E51 (search for similar items in EconPapers)
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Working Paper: Pakistan, politics and political business cycles (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pid:journl:v:51:y:2012:i:2:p:153-166
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