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Connections between Economy and Politics – the Relevance of the Typology of Political Parties

Laura Obreja Brasoveanu (), Victor Dragotă () and Meral Kagitci

Timisoara Journal of Economics, 2011, vol. 4, issue 4(16), 211-220

Abstract: This study examines the impact of the typology of political parties on macroeconomic variables. Considering the impact on macroeconomic variables of the typology of political parties is an original approach. From academic point of view, such a study may provide an answer to the question of whether strategic decisions of political parties can influence macroeconomic variables. It is recommended that the option for a particular party or another to be based on knowledge of the main economic implications of the vote. At the limit, the absence of any implications of this principle can be said to sustain the independence between economy and politics. Although the analysis should be studied even deeper, we can find some differences between the characteristic indicators of the two types of governance. Economic growth, measured through the real GDP growth rate, is higher in periods of left-winged government. Regarding the structure of public expenditures, there is a higher share of wages, materials and operational expenses and interest in GDP, in the context of right-wing government, while left-wing government has higher rates for transfers and subsidies and capital expenditures. In terms of the structure of tax revenues, there is a higher share of VAT in GDP in right-wing government, while left-wing government is characterized by higher rates of income tax, social security, custom duties and excises in GDP.

Keywords: economic growth; fiscal policy; institutional factors; politics (search for similar items in EconPapers)
JEL-codes: E6 H2 (search for similar items in EconPapers)
Date: 2011
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