Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/90656
Authors: 
Schuknecht, Ludger
Year of Publication: 
1998
Series/Report no.: 
WTO Staff Working Paper ERAD-97-04
Abstract: 
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.
Subjects: 
Elections
political business cycles
fiscal policies
deficits
developing countries
JEL: 
F41
E62
H62
Document Type: 
Working Paper

Files in This Item:
File
Size
81.5 kB
757.91 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.