Main Article Content

Michał Wielechowski

Keywords : political budget cycle (PBC), election cycle, general government expenditure, European Union, country-specific PBCs
We test whether there are country-specific election cycles present in the public expenditure in the European Union. Using panel data on all 28 current EU Member States from 1995 to 2015, we find in general evidence for an election-induced expansion in total government spending and within the categories of public services, safety, housing, recreation, and education. Our contribution is to combine the notion of targeting specific public spending categories and the occurrence of country-specific political budget cycles in the EU. The results indicate that election cycles vary substantially across countries. We observe a significant election effect in about 77% of our estimates. Two thirds of these observed significant effects represent increased spending in pre-election period.

Article Details

How to Cite
Wielechowski, M. (2019). POLITICAL BUDGET CYCLES – GOING BEYOND THE AVERAGE. Acta Scientiarum Polonorum. Oeconomia, 18(1), 91–96. https://doi.org/10.22630/ASPE.2019.18.1.10

Baltagi, B.H. (1995). Econometric Analysis of Panel Data. John Wiley & Sons, Hoboken NJ.

Block, S.A. (2002). Political business cycles, democratization, and economic reform: the case of Africa. Journal of Development Economics, 67, 205-228. DOI: 10.1016/ S0304-3878(01)00184-5 (Crossref)

Brender, A. (2003). The effect of fiscal performance on local government election results in Israel: 1989-1998. Journal of Public Economics, 87, 2187-2205. DOI: 10.1016/ S0047-2727(02)00045-2 (Crossref)

Brender, A., Drazen, A. (2008). How do budget deficits and economic performance affect reelection prospects? American Economic Review, 98 (5), 2203-2220. DOI: 10.1257/aer.98.5.2203 (Crossref)

Brender, A., Drazen, A. (2013). Elections, leaders, and the composition of government spending. Journal of Public Economics, 97 (1), 18-31. DOI: 10.1016/ j.jpubeco.2012.08.011 (Crossref)

Buti, M., Van den Noord, P. (2004). Fiscal discretion and elections in the early years of EMU. Journal of Common Market Studies, 43, 737-756. DOI: 10.1111/j.0021- 9886.2004.00527.x (Crossref)

Drazen, A., Eslava, M. (2010). Electoral manipulation via voter-friendly spending: theory and evidence. Journal of Development Economics, 92, 39-52. DOI: 10.1016/ j.jdeveco.2009.01.001 (Crossref)

Efthyvoulou, G. (2012). Political budget cycles in the European Union and the impact of political pressures. Public Choice, 153, 295-327. DOI: 10.1007/s 11127-011- 9795-x (Crossref)

Enkelmann, S., Leibrecht, M. (2013). Political expenditure cycles and election outcomes: Evidence from disaggregation of public expenditures by economic functions. Economics Letters, 121, 128-132. DOI: 10.1016/ j.econlet.2013.07.015 (Crossref)

Franzese, R. (2000). Electoral and partisan manipulation of public debt in developed democracies, 1956-1990. [In:] R. Strauch, J. Von Hagen (eds.), Institutions, Politics and Fiscal Policy. Kluwer Academic Press, Dordrecht, 61-83. (Crossref)

Garmann, S. (2017). Political budget cycles and fiscally conservative voters. Economics Letters, 155, 72-75. DOI: 10.1016/j.econlet.2017.03.023 (Crossref)

Katsimi, M., Sarantides, V. (2012). Do elections affect the composition of fiscal policy in developed, established democracies? Public Choice, 151, 325-362. DOI: 10.1007/s11127-010-9749-8 (Crossref)

Klomp, J., De Haan, J. (2013a). Political budget cycles and election outcomes. Public Choice, 157, 245-267. DOI: 10.1007/s11127-012-9943-y (Crossref)

Klomp, J., De Haan, J. (2013b). Do political budget cycles really exist? Applied Economics, 45 (3), 329-341. DOI: 10.1080/00036846.2011.599787 (Crossref)

Kneebone, R., McKenzie, K., (2001). Electoral and partisan cycles in fiscal policy: an examination of Canadian provinces. International Tax and Public Finance, 8 (5), 753-774. DOI: 10.1023/A:1012895211073 (Crossref)

Mink, M., De Haan, J. (2006). Are there political budget cycles in the euro area? European Union Politics, 7, 191-211. DOI: 10.1177/1465116506063706 (Crossref)

Nordhaus, W.D. (1975). The Political Business Cycle. The Review of Economic Studies, 42 (2), 169-190. (Crossref)

Peltzman, S. (1992). Voters as fiscal conservatives. Quarterly Journal of Economics, 107, 325-345. DOI: 10.2307/2118475 (Crossref)

Pesaran, M.H., Shin, Y.,Smith, R., (1999). Pooled mean group estimator of dynamic heterogeneous panels. Journal of the American Statistical Association, 94, 621-634. (Crossref)

Rogoff, K. (1990). Equilibrium Political Budget Cycles. The American Economic Review, 80, 21-36.

Schuknecht, L. (2000). Fiscal policy cycles and public expenditure in developing countries. Public Choice, 102, 115-130. DOI: 10.1023/A:1005026806998 (Crossref)

Shi, M., Svensson, J. (2002). Conditional political budget cycles. CEPR Discussion Paper 3352.

Shi, M., Svensson, J. (2003). Political Budget Cycles: A Review of recent Developments. Nordic Journal of Political Economy, 29, 67-76.

Shi, M., Svensson, J. (2006). Political budget cycles: do they differ across countries and why? Journal of Public Economics, 90, 1367-1389. DOI: 10.1016/ j.jpubeco.2005.09.009 (Crossref)

Tujula, M., Wolswijk, G. (2007). Budget balances in OECD countries: what makes them change? Empirica, 34, 1-14. DOI: 10.1007/s10663-006-9015-y (Crossref)

Vergne, C. (2009). Democracy, elections and allocation of public expenditures in developing countries. European Journal of Political Economy, 25 (1), 63-77. (Crossref)



Download data is not yet available.