Revenue decentralization, central oversight and the political budget cycle: Evidence from Israel

Arbeitspapier

This paper examines whether revenue decentralization and direct external financial supervision affect the incidence and strength of political budget cycles, using a panel of Israeli municipalities during the period 1999-2009. We find that high dependence on central government transfers - as reflected in a low share of locally raised revenues in the municipality's budget - exacerbates political budget cycles, while tight monitoring - exercised through central government appointment of external accountants to debt accumulating municipalities - eliminates them. These results suggest that political budget cycles can result from fiscal institutions that create soft budget constraints: that is, where incumbents and rational voters can expect that the costs of pre-election expansions will be partly covered later by the central government.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: ZEW Discussion Papers ; No. 15-046

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior ; State and Local Budget and Expenditures ; State and Local Borrowing ; Fiscal Policy
• Thema: political budget cycles ; soft budget constraint ; local governments ; decentralization

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Baskaran, Thushyanthan ; Blesse, Sebastian ; Brender, Adi ; Reingewertz, Yaniv
• Ereignis: Veröffentlichung
• (wer): Zentrum für Europäische Wirtschaftsforschung (ZEW)
• (wo): Mannheim
• (wann): 2015

Weitere Informationen

• Handle: http://hdl.handle.net/10419/112755
• URN: urn:nbn:de:bsz:180-madoc-394945
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ