Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82008
Authors: 
Alt, James E.
Dreyer Lassen, David
Year of Publication: 
2005
Series/Report no.: 
EPRU Working Paper Series 2005-03
Abstract: 
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.
Subjects: 
fiscal transparency
political polarization
fiscal policy
budget deficits
political budget cycles
electoral policy cycles
JEL: 
D72
E62
H62
Document Type: 
Working Paper

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