Political Budget Cycles in New versus Established Democracies

Adi Brender (adi.brender@boi.org.il) and Allan Drazen
Additional contact information
Allan Drazen: University of Maryland

No 2005.04, Bank of Israel Working Papers from Bank of Israel

Abstract: Like other recent studies, we find a political deficit cycle in a large cross-section of countries, but show that this result is driven by the experience of “new democracies”. The political budget cycle in new democracies accounts for the finding of a budget cycle in larger samples that include these countries and disappears when they are removed from the larger sample. The political deficit cycle in new democracies accounts for findings in both developed and less developed economies, for the stronger cycle in weaker democracies, and for differences in the political cycle across governmental and electoral systems. Our findings may reconcile two contradictory views of pre-electoral manipulation, one that it is a useful instrument to gain voter support and a widespread empirical phenomenon, the other that voters punish rather than reward fiscal manipulation.

Keywords: political budget cycle; new democracy; fiscal manipulation (search for similar items in EconPapers)
JEL-codes: D72 E62 H62 (search for similar items in EconPapers)
Pages: 61 pages
Date: 2005-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (474)

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https://boiwebrepec.azurefd.net/RePEc/boi/wpaper/WP_2005.04.pdf First version, 2005 (application/pdf)

Related works:
Journal Article: Political budget cycles in new versus established democracies (2005)
Working Paper: Political Budget Cycles in New versus Established Democracies (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:boi:wpaper:2005.04

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