Overlapping Political Budget Cycles

Aufsätze referiert extern - Web of Science

Dirk Foremny, Ronny Freier, Marc-Daniel Moessinger, Mustafa Yeter

In: Public Choice 177 82018), 1-2, S. 1-27


We advance the literature on political budget cycles by testing for cycles in expenditures for elections to the legislative and the executive branches. Using municipal data, we identify cycles independently for the two branches, evaluate the effects of overlaps, and account for general year effects. We find sizable effects on expenditures before legislative elections and even larger effects before joint elections to the legislature and the office of mayor. In the case of coincident elections, we show that it is important whether the incumbent chief executive seeks reelection. To account for the potential endogeneity of that decision, we apply an IV approach using age and pension eligibility rules.

JEL-Classification: H11;H71;H72;H74
Keywords: Election cycles, Municipal expenditures, Legislative and executive elections, Instrumental variables approach