Creative Accounting and Electoral Motives: Evidence from OECD Countries

Markus Reischmann ()

No 201, ifo Working Paper Series from ifo Institute - Leibniz Institute for Economic Research at the University of Munich

Abstract: Using an unbalanced panel of 27 OECD countries over the period 1970–2011, I examine whether electoral motives influenced creative accounting. Governments engage in “below-the-line” operations, such as transactions in financial assets, that do not show up in the deficit figures but give rise to changes in debt. I use the difference between the change in public debt and the deficit (stock-flow adjustment) to measure creative accounting. The results suggest that governments strategically engaged in creative accounting before regular elections so as to sugarcoat the budget balance. I also provide an overview of government interventions that gave rise to large stock-flow adjustments.

JEL-codes: C23 D72 E62 H61 H62 H63 P16 (search for similar items in EconPapers)
Date: 2015
References: View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Creative accounting and electoral motives: Evidence from OECD countries (2016)
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