Arbeitspapier
Fiscal policy cycles and the exchange regime in developing countries
The paper studies empirically fiscal policies around elections in 25 developing countries as affected by the exchange regime. It is argued that countries with flexible exchange regimes are less likely to engage in expansionary fiscal policies before elections because such policies can result in devaluations and inflation which affects government popularity adversely. The empirical results show that governments indeed try to improve their re-election prospects with the help of expansionary fiscal policies only in countries with fixed exchange rates and adequate reserve levels. For some countries, this raises doubts about the usefulness of fixed exchange rates for stabilizing the macro economy, unless reforms of the institutional framework reduce the scope for election-oriented fiscal expansion.
- Language
-
Englisch
- Bibliographic citation
-
Series: WTO Staff Working Paper ; No. ERAD-97-04
- Classification
-
Wirtschaft
Open Economy Macroeconomics
Fiscal Policy
National Deficit; Surplus
- Subject
-
Elections
political business cycles
fiscal policies
deficits
developing countries
- Event
-
Geistige Schöpfung
- (who)
-
Schuknecht, Ludger
- Event
-
Veröffentlichung
- (who)
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World Trade Organization (WTO)
- (where)
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Geneva
- (when)
-
1998
- DOI
-
doi:10.30875/a61e7f78-en
- Handle
- Last update
-
10.03.2025, 11:41 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Schuknecht, Ludger
- World Trade Organization (WTO)
Time of origin
- 1998
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