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Political Budget Cycles: Conditioning Factors and New Evidence

Author

Listed:
  • Linda G. Veiga

    (University of Minho, Department of Economics/NIPE)

  • Georgios Efthyvoulou

    (University of Sheffield)

  • Atsuyoshi Morozumi

    (University of Nottingham)

Abstract
This chapter reviews the literature on political budget cycles (PBCs), focusing on studies that analyze the conditionality of opportunistic effects. First, factors that affect incentives of politicians to embark on pre-electoral policy manipulations are highlighted, and then factors that influence the capability of those manipulations to generate additional votes are discussed. Finally, the effects of personal characteristics of leaders on PBCs are explored. To complement the review, an empirical investigation of electoral effects on central governments’ deficit, expenditure and revenue series, under various political arrangements, is implemented on a large panel covering 78 countries and 42 years of data (1975 to 2016). Empirical results confirm that PBCs are more likely to occur under certain politico-institutional circumstances, including predetermined elections, disputed elections, majoritarian electoral rules, larger private benefits from holding office, weak constraints on executives, a high proportion of uninformed voters, and new democracies.

Suggested Citation

  • Linda G. Veiga & Georgios Efthyvoulou & Atsuyoshi Morozumi, 2018. "Political Budget Cycles: Conditioning Factors and New Evidence," NIPE Working Papers 21/2018, NIPE - Universidade do Minho.
    • Handle: RePEc:nip:nipewp:21/2018
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    File URL: http://www.nipe.eeg.uminho.pt/Uploads/WP_2018/NIPE_WP_21_2018.pdf
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    References listed on IDEAS

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    Cited by:

    1. Kayode Taiwo & Linda G. Veiga, 2020. "Is there an “invisible hand” in the formula-based intergovernmental transfers in Nigeria?," NIPE Working Papers 02/2020, NIPE - Universidade do Minho.

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    Keywords

    political budget cycles; political business cycles; fiscal policy; conditionality; rhythms;
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