Politico-Economic Interactions in Canada: an Empirical Assessment

François Pétry and Howard R. Harmatz
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François Pétry: Laval University
Howard R. Harmatz: University of Manitoba

Public Finance Review, 1995, vol. 23, issue 3, 305-335

Abstract: This study examines the respective impact of economic and political factors on federal public expenditure by replicating the Frey and Schneider politico-economic model with Canadian data from 1954 to 1992. We show that federal expenditure has been sensitive to (a) the rate of unemployment and the real wage rate and (b) the interplay of reelection and ideological influences. Although partisan cycles fail to appear when pohtico-economic interactions are specified, following the general Frey and Schneider model, they emerge when we adjust the general model to take into account specific Canadian institutional features, namely, the existence of minority governments, and the Quebec origin of the government leader .

Date: 1995
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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:23:y:1995:i:3:p:305-335

DOI: 10.1177/109114219502300302

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