Political cycle and fiscal policy in the countries of the European Union
| Authors | |
|---|---|
| Year of publication | 2013 |
| Type | Article in Periodical |
| Magazine / Source | Ekonomická revue |
| MU Faculty or unit | |
| Citation | |
| Web | http://www.ekf.vsb.cz/export/sites/ekf/cerei/cs/Papers/VOL16NUM02PAP04.pdf |
| Doi | http://dx.doi.org/10.7327/cerei.2013.06.04 |
| Field | Economy |
| Keywords | election; fiscal policy; ideology; political-budget cycle; state budget |
| Attached files | |
| Description | The effort of politicians in power to form the decision of voters through expansive fiscal policy in pre-election period is still actual topic. This article aims to determine whether governments in the European Union countries initiate the political-budget cycle. We analyze 23 EU member states in the period 1995–2008. We pay attention to four institutional factors which can contribute to the creation of the political-budget cycle: length of democracy, type of parliamentary elections, term of elections and ideology. We found out that the political-budget cycle was present throughhout the European Union countries in this period. The factor of the length of democracy had small impact on statistical significance of results. However, ideology turned out to be the most important factor in our analysis. Current revenues were used as a tool of fiscal policy in the years of elections predominantly by ideologi-cally mixed governments. Left-wing governments used rather the expenditure side of the budget to win the favour of the electorate. The type of elections (regular or premature) became relevant only in specific cases and in com-bination with other institutional factors. Finally, especially the new EU member governments consider the spring or autumn term of election as a criterion co-determining their pre-election fiscal policy. |
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