Arbeitspapier

Vote buying or (political) business (cycles) as usual?

We provide new evidence on the short-run effect of elections on monetary aggregates. We study month-to-month fluctuations in the growth rate of M1 in a sample of 85 low and middle income democracies from 1975 to 2009. The evidence shows an increase in the growth rate of M1 during election months of about one tenth of a standard deviation. A similar effect can neither be detected in established OECD democracies nor in the months leading up to the election. The effect is larger in democracies with many poor and uneducated voters, and in Sub-Saharan Africa and in East-Asia and the Pacific. We show that the election month monetary expansion is demand driven and can be best explained by systemic vote buying. Systemic vote buying requires significant amounts of cash to be disbursed right before elections. The finely timed increase in M1 that we observe in the data is consistent with this. The timing is inconsistent with a monetary cycle aimed at creating an election time boom and it cannot be, fully, accounted for by other possible explanations.

Sprache
Englisch

Erschienen in
Series: ZEW Discussion Papers ; No. 15-017

Klassifikation
Wirtschaft
Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
Money Supply; Credit; Money Multipliers
Economic Development: General
Thema
political business cycles
vote buying
monetary economics

Ereignis
Geistige Schöpfung
(wer)
Aidt, Toke
Asatryan, Zareh
Badalyan, Lusine
Heinemann, Friedrich
Ereignis
Veröffentlichung
(wer)
Zentrum für Europäische Wirtschaftsforschung (ZEW)
(wo)
Mannheim
(wann)
2015

Handle
URN
urn:nbn:de:bsz:180-madoc-388239
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Aidt, Toke
  • Asatryan, Zareh
  • Badalyan, Lusine
  • Heinemann, Friedrich
  • Zentrum für Europäische Wirtschaftsforschung (ZEW)

Entstanden

  • 2015

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