Coalition incentives for political budget cycles

Hanusch, Marek

doi:10.1007/s11127-010-9736-0

Cited by 20 publications

(8 citation statements)

References 32 publications

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“…In particular, the literature that deals with the role of veto players in budgeting (Franzese, 2002a;Tsebelis, 2002;Tsebelis and Chang, 2004) has paid little attention to PBC theory as the main preoccupation remained the detrimental effect of government fragmentation on budget control in the long run. 2 The main thrust of the PBC's literature, on the other hand, only tangentially addressed the conditioning effects of governmental fragmentation with either mixed results (Alt and Rose, 2007;Franzese, 2002b) or without empirical evidence to support the theoretical innovations (Hanusch, 2012). By building a model on veto players' fiscal impact in fragmented governments, I offer a formal conceptualization of PBCs in different governmental settings and then proceed to empirically test the model's implications.…”

Section: Government Fragmentation and Fiscal Profligacymentioning

confidence: 99%

Intra-governmental bargaining and political budget cycles in the European Union

Bojar

2014

European Union Politics

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Political fragmentation has been widely recognized by political economists as an important cause for fiscal profligacy in democratic market economies because of the common pool nature of fiscal resources. These predictions, however, sit uneasily with the notion of governmental veto players' ability to block each other's spending plans for electoral purposes. Applying the logic of a bargaining-game between veto players in a political budget cycle framework, I first model that multiple players in the budget game are in fact likely to moderate pre-electoral budget outcomes. Empirical results from a cross-section time-series analysis in EU member states provide corroborative evidence that fiscal electioneering is indeed more prevalent among cohesive, single-party settings. The findings are robust to alternative identification of elections, fiscal changes and sample selection.

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Section: Government Fragmentation and Fiscal Profligacymentioning

confidence: 99%

Intra-governmental bargaining and political budget cycles in the European Union

Bojar

2014

European Union Politics

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“…Our study differs from Brender and Drazen's work, as we do not analyze whether the Chief Executive benefits from election-motivated fiscal policies. As Hanusch (2012) points out, certainly in the OECD but also in other parts of the world, the government is formed by a coalition of parties. Although it seems safe to assume that each coalition member seeks re-election, some parties may gain more from budget manipulation than others.…”

Section: Previous Studiesmentioning

confidence: 99%

“…In contrast to Brender and Drazen (2008), we take into account that many countries have coalition governments (Hanusch 2012). We therefore focus on votes received by political parties participating in the government.…”

Section: Introductionmentioning

confidence: 99%

Political budget cycles and election outcomes

2012

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This paper addresses two empirical questions. Is fiscal policy affected by upcoming elections? If so, do election-motivated fiscal policies enhance the probability of re-election of the incumbent? Employing data for 65 democratic countries over 1975-2005 in a semi-pooled panel model, we find that in most countries fiscal policy is hardly affected by elections. The countries for which we find a significant political budget cycle are very diverse. They include 'young' democracies but also 'established' democracies. In countries with a political budget cycle, election-motivated fiscal policies have a significant positive (but fairly small) effect on the electoral support for the political parties in government.

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“…The logical next step in this line of research is to analyse how the coalition/multiparty government may use its power for their own benefit, usually known as the political business cycle, such as that proposed by Hanusch(2012). Another potential theoretical development that departs from this paper is modelling the strategic behaviour of the president given uncertainties in the coalition at the parliament such as in the political bargaining literatures (Staahl, 1972;Rubinstein, 1982;Usher, 2012).…”

Section: Resultsmentioning

confidence: 99%

The Political Economy of Coalition in Indonesia

Sanjaya

2016

JDE

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Politics as an art of bargaining has gain prominent momentum following the victory of the president-elect Joko Widodo in Indonesia in 2014. This paper estimates the value of political parties under uncertainties over two possible coalitions: the Great Indonesia Coalition (Koalisi Indonesia Hebat, KIH) that supports Joko Widodo, and the Red & White Coalition (Koalisi Merah Putih, KMP) that supports Prabowo Subianto, the president candidate from the Gerindra Party. The estimation shows that the Golkar, the second largest earner of seats in the parliament, is more valuable for KMP, making them expensive to be maintained within this coalition. It suggests that the best choice for Golkar is to jump to KIH, unless the KMP provides substantial payoff to lure this party. Nonetheless, the pure strategy Nash equilibrium in a non-cooperative game of political bargaining shows that even though a party has small fair values, but it still has decisive impact in the bargaining table of a coalition.

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Coalition incentives for political budget cycles

Abstract: Political budget cycles, Elections, Coalition government, Budget deficits, D72, E62, D82,

Cited by 20 publications

References 32 publications

Intra-governmental bargaining and political budget cycles in the European Union

Intra-governmental bargaining and political budget cycles in the European Union

Political budget cycles and election outcomes

The Political Economy of Coalition in Indonesia

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