Political budget cycles in the European Union and the impact of political pressures

Efthyvoulou, Georgios

doi:10.1007/s11127-011-9795-x

Cited by 110 publications

(100 citation statements)

References 60 publications

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“…Mink and De Haan (2006 provide similar evidence for European Union (EU) member states after the start of the monetary union. 3 Similarly, Efthyvoulou (2011) reports for the 27 EU member states over the period 1997-2008 that incumbent governments tend to 2 Similarly, Schuknecht (2000) finds for a sample of twenty-four developing countries over 1973-1992 that incumbent governments tend to increase public investment prior to elections. Vergne (2009), using data on 24 developing countries from 1975 to 2001, reports that elections shift the composition of spending towards current expenditures and away from capital expenditures.…”

Section: Previous Studiesmentioning

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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Section: Previous Studiesmentioning

confidence: 99%

Political budget cycles and election outcomes

2012

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“…The variable is also coded zero in non-election years, as it is meaningless to measure the incumbent's fear of losing an election in a non-election year. This coding follows the standard practice in the field (see, for instance, Efthyvoulou, 2011).…”

Section: The Variable Election Is Based On the National Elections Acrossmentioning

confidence: 99%

Electoral Confidence and Political Budget Cycles in Non-OECD Countries

Eibl

Lynge-Mangueira

2016

St Comp Int Dev

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“…92 de Haan and Klomp 2013, 338. 93 Aidt, Veiga, and Veiga 2011;Efthyvoulou 2012. 94 Harding and Stasavage 2014;Stasavage 2005.…”

Section: Discussionmentioning

confidence: 99%

“…It is equally possible that a large margin of electoral victory could disguise significant intraparty electoral competition (e.g., Giliomee and Simkin 1999). However, a focus on the margin of victory is both conceptually straightforward and captures the core logic of democratic theory, and for this reason is adopted elsewhere in the literature (Aidt, Veiga, and Veiga 2011;Efthyvoulou 2012), and is supported by recent scholarship on electoral competitiveness in Africa (Rakner and van de Walle 2009). 53 The use of this variable presumes that actual electoral competitiveness is closely associated with government expectations of competitiveness when making decisions about taxation prior to the election.…”

Section: Taxation and Political Budget Cycles In Developing Countriesmentioning

confidence: 99%

Electoral Competitiveness, Tax Bargaining and Political Incentives in Developing Countries: Evidence from Political Budget Cycles Affecting Taxation

Prichard¹

2016

Brit. J. Polit. Sci.

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Studies of political budget cycles in developing countries have generally sought to inform understanding of short-term fiscal dynamics, but can also offer unique insight into broader political dynamics in developing countries. This article correspondingly employs markedly improved data in order to study the impact of elections on tax collection, and draw broader lessons. It shows that while elections as a group have had no significant effect on tax collection, the subset of competitive elections has had a significant negative impact on pre-election tax collection; while this effect appears to be largest where incumbents are particularly unpopular. This provides powerful evidence that the impact of elections on political incentives in developing countries is conditioned by the existence of an electorally competitive opposition, while offering preliminary evidence that popular resistance to taxation by unpopular governments may be an important means by which taxpayers may generate pressure for improved governance.A long-established research tradition explores the effects of elections on short-term fiscal policy making, widely dubbed 'political budget cycles'. Models of opportunistic budget cycles predict expanded public spending and reduced taxation in advance of elections, as governments seek to secure short-term political support among voters with short time horizons or limited information. 1 The recent literature has, in turn, increasingly focused on the possibility of 'conditional political budget cycles', and a variety of studies have found that political budget cycles are more pronounced where democratic institutions, and broader checks and balances, are relatively weak -as is frequently the case in developing countries. 2 These studies have argued that weak institutional environments have facilitated opportunistic efforts to employ short-term fiscal policy measures to secure political support, though often at the expense of the overall quality of economic management.However, most studies of political budget cycles have continued to focus primarily on public expenditure, with comparatively limited, and inconclusive, research focused on the impacts of political budget cycles on taxation. This represents a significant oversight: the effects of elections on tax collection may be both more substantively important and reveal more about broader political dynamics in developing country democracies. Short-term increases in public spending are relatively easily financed through borrowing, and in many (though not all) cases * Department of Political Science and School of Global Affairs, University of Toronto, and Institute of Development Studies, UK (email: wilson.prichard@utoronto.ca). Enormous thanks to Paola Salardi for invaluable support in shaping the analysis in the article, and to Mick Moore for very helpful comments about the framing of the article. Data replication sets available at https://dataverse.harvard.edu/dataverse/BJPolS and online appendices at http://dx.doi.org

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Political budget cycles in the European Union and the impact of political pressures

Cited by 110 publications

References 60 publications

Political budget cycles and election outcomes

Political budget cycles and election outcomes

Electoral Confidence and Political Budget Cycles in Non-OECD Countries

Electoral Competitiveness, Tax Bargaining and Political Incentives in Developing Countries: Evidence from Political Budget Cycles Affecting Taxation

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