The Political Budget Cycle is Where You Can't See It: Transparency and Fiscal Manipulation

Arbeitspapier

We investigate the effects of fiscal transparency and political polarization on the prevalence of electoral cycles in fiscal balance. The recent political economy literature on electoral cycles identifies such cycles mainly in weak and recent democracies. In contrast, we show, conditioning on a new index of institutional fiscal transparency, that electoral cycles in fiscal balance are a feature also of advanced industrialized economies. Using a sample of nineteen OECD countries in the 1990’s, we identify a persistent pattern of electoral cycles in low(er) transparency countries, while no such cycles can be observed in high(er) transparency countries. Furthermore, we find, in accordance with recent theory, that electoral cycles are larger in more politically polarized countries.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: EPRU Working Paper Series ; No. 2005-03

Classification and Topics

• Classification: Wirtschaft ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior ; Fiscal Policy ; National Deficit; Surplus
• Subject: fiscal transparency ; political polarization ; fiscal policy ; budget deficits ; political budget cycles ; electoral policy cycles ; Politischer Konjunkturzyklus ; Finanzpolitik ; Haushaltsdefizit ; OECD-Staaten ; Fiskalische Transparenz

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Alt, James E. ; Dreyer Lassen, David
• Event: Veröffentlichung
• (who): University of Copenhagen, Economic Policy Research Unit (EPRU)
• (where): Copenhagen
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/82008
• Last update: 10.03.2025, 11:42 AM CET