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A political business cycle (PBC), with governments adjusting and timing economic policy for electoral gains, has long been hypothesized. A lack of data has so far limited testing of this phenomenon for government policies as opposed to fiscal outcomes such as tax revenue or government deficit, especially at the national level. We use new monthly data on tax reform announcements for a set of 22 democracies, 1988–2014, to test the PBC hypothesis for taxation. In addition to the traditional electoral strategy formulation of the PBC, we also put forward and test a capacity version of the PBC. We find evidence for the capacity version but not the traditional version of the PBC: tax reforms are less likely to be announced before elections and more likely after elections, independently of whether they are increases or decreases. Our evidence suggests that while a PBC exists, it may be less driven by strategic electioneering and more innocuous than previously assumed. [ABSTRACT FROM AUTHOR]

Budget allocation and budget planning can be used in different ways. In addition, it can be part of a political budget cycle. Previous research has highlighted the political budget cycle’s existence in European countries, demonstrating its impact on public revenue and expenditure near elections. However, citizens often lack awareness of this phenomenon, underscoring the need for vigilant scrutiny. In addition, elected politicians increasingly rely on voters for support, targeting them during budget allocation and election campaigns. In Latvia, the mayors have a role in budget planning because they work full-time and are the head of the financial commission. In Latvia, despite a lack of trust in local politicians, there is a tendency for most of the mayors to be re-elected. The article aims to examine what kind of role the council’s chairperson has in the local government’s budget allocation process and what factors affect the budget allocation process in Latvia. The article’s scope encompasses the years 2009 to 2017, spanning two election terms (2009-2013; 2013-2017), and focuses on eight state cities in Latvia, excluding the capital city, Riga. Notably, local governments with a higher percentage of council members from the mayor’s party tend to exhibit higher expenditure levels. The findings of this study suggest that various socio-economic and political factors impact the financial performance of local governments in Latvia. These results underscore the significance of population and unemployment in shaping local government expenditures. Simultaneously, this research has highlighted the importance of political factors such as the majority in the local government and time spent in the mayor’s position. Moreover, it reveals that long-serving mayors and a majority in the council also influence budget allocation decisions. This article’s implications can guide policymakers in making informed decisions regarding municipal budget expenditures and revenues. [ABSTRACT FROM AUTHOR]

Despite recognition that government officials have politically motivated incentives to pursue new infrastructure construction at the expense of infrastructure upkeep, no prior research directly addresses how political incentives affect road maintenance separate from road construction. This paper investigates how local political incentives affect local road maintenance using unique data on completed road maintenance projects and difference-in-differences which leverages exogenous timing of mayoral elections. Since residents complain about damaged roads and can also be frustrated by travel delays caused by road maintenance, it is theoretically ambiguous how elected officials manipulate road maintenance, assuming they do so for political purposes. We show local election cycles shift road maintenance timing and location. We provide evidence that maintenance follows different patterns in mayoral election years and that maintenance is shifted around sub-city geographic units based on those units' political similarity of registered voters. A mayoral election costs $90,623 in additional road-related costs, translating to $28,093,182 per election for large cities. [ABSTRACT FROM AUTHOR]

Patronage is often considered a subtype of clientelism that arises through reciprocal arrangements between a politician and a citizen, where electoral support is rewarded with public employment. In Chile, there is evidence of clientelist practices at the municipal level. However, these studies have mainly had a qualitative focus. To complement these studies, this research aims to provide quantitative evidence using panel data and two-way fixed effects. Thus, we analyse the personnel hiring through the Mercado Público platform between 2009 and 2017 across the country’s 345 municipalities, finding evidence that support two hypotheses: (i) there is a political budget cycle, increasing spending by 14.9% during the election year and (ii) independent politicians spend less on hiring people than mayors who are militants of political parties, being this expenditure -9.8% less for independents than for the latter. These results seek to complement other research on clientelism and patronage in a context of the rise of independent politicians and citizen questioning of traditional political parties, as well as the relevance of public spending in local governments. [ABSTRACT FROM AUTHOR]

Recycling and the recovery of waste are crucial waste management strategies. In light of the new European Union (EU) circular economy approach, these strategies remain core pillars of a competitive and sustainable waste value chain. Local governments have an important role in controlling and checking the implementation of waste management policies. We study the spatial determinants of waste recovery using a dataset of 102 Italian provinces from 2001 to 2014. To induce a possible source of exogenous variation, we exploit the political cycle of the provinces to isolate the impact of waste recovery in neighbouring provinces on its own province's waste recovery. We find that after the transposition of the 2008 EU Waste Framework Directive, provinces mimic their own neighbours in the separate collection of waste aimed at recycling and recovery. This effect is more pronounced during pre-electoral years than non-pre-electoral ones, and fully guided by provinces where the president can run for re-election. [ABSTRACT FROM AUTHOR]

We investigate whether the presence of fiscal rules might limit the insurgence of a Political Budget Cycle (PBC) in investment spending at municipal level. Data based on the balance sheets of Italian municipalities are explored for the period 1999–2012. We investigate the effect of the Domestic Stability Pact (DSP) and rely on the fact that, since 2001, this tax rule has not been binding for municipalities with under 5,000 inhabitants. Our main contribution consists of exploiting this quasi-experimental setting by means of a difference-in-discontinuities estimation strategy in order to obtain unbiased estimates. In comparison with existing results, our study makes three observations. Firstly, the easing of fiscal rules generates an increase in capital expenditure only in the year immediately before elections. Secondly, this increase only arises for those investments which produce immediately-visible effects. Finally, the size of the electoral cycle shows a 136 percent increase in these investments which is more than five times larger than that reported in the literature. [ABSTRACT FROM AUTHOR]

Management of the expenditure public and cycles political budget: The case in the city councils of the Region West of Mexico Resumen Este trabajo tiene por objetivo medir la influencia del ciclo político presupuestario en la composición del gasto público de los municipios del occidente de México, concretamente, si los gobernantes utilizan las políticas de gasto expansionistas para tratar de influir en las decisiones de voto de los electores y, en ese caso, qué gastos son las preferidos para tratar de conservar el poder. La estimación se realizó utilizando el modelo Arellano y Bond (1991), que proponen un estimador basado en el Método Generalizado de Momentos (GMM), que utiliza variables instrumentales basadas en retardos y diferencias de todas las variables del modelo. Los resultados muestran que los gastos preferidos por los gobernantes antes de las elecciones son, incrementos en el gasto total por habitante, gasto en inversión y una contracción del gasto corriente en relación al gasto total, limitado a variables te carácter presupuestario. Abstract This study aims to measure the influence of the political budget cycle in the composition of public expenditure of the municipalities in the western part of Mexico, specifically, if rulers used the expansionist spending policies to try to influence the decisions of voters vote and, if so, what expenses are the preferred to try to retain power. The estimate was made using the model Arellano and Bond (1991), which proposed an estimator based on the method generalized of moments (GMM), using instrumental variables based on delays and differences of all the variables in the model. The results show that preferred by the rulers before the election expenses are increases in total spending per capita, investment spending and a contraction of current expenditure in relation to the total expenditure, limited to variables you budgetary character.

Abstract A shortage of physicians in local public hospitals is often a heated political issue. When local politicians have the authority to intervene in the management of a public hospital, they may increase the employment of physicians during election years in order to alleviate the shortage. We test this hypothesis empirically using a census of city hospitals in Japan from 2002 to 2011 (N = 4583). Our results support the hypothesis that the number of physicians increases in election years. This effect is stronger in cities with a greater population of elderly residents. We also find that physicians tend to come from university hospitals in the same region. Overall, this paper provides direct evidence of political intervention on physician employment. Highlights • A shortage of hospital physicians was a heated political issue in Japan. • We examine how the timing of mayoral elections affected local public hospitals in Japan. • The number of physicians increased in election years. • The effect was stronger in cities with a greater population of elderly residents. • We find that physicians came from university hospitals in the same region. [ABSTRACT FROM AUTHOR]

The aim of this paper is to determine the presence of political budget cycles related to the elections of presidents in Mexico over the period 1980-2014. To do so, autoregressive and moving average models, extended to take account of economic shocks, are estimated for the total public expenditure, the programmable expenditure as well as the components of the latter. Our results suggest that economic shocks (measured by manufacturing production) play a minor role in the dynamics of public expenditure and, more important, that political budget cycles are present in total expenditure as well as current and capital expenditure, among others. This evidence reflects opportunist conducts of governments to remain in power as well as the use of public resources to benefit specific political groups. [ABSTRACT FROM AUTHOR]

The literature on the opportunistic political budget cycle in Mexican States shares the limitation that budgetary policy is assumed to be a unilateral decision of the executive branch and fails to consider the political and institutional constraints governors face. The purpose of this study is to relax that assumption and evaluate whether an increase in the level of competition in elections for local congresses plays a moderating role on the opportunistic political budget cycle. The empirical evidence presented shows that local congresses exert a moderating role and inhibit the opportunistic political budget cycle when there is a high level of competition in elections for state representatives. [ABSTRACT FROM AUTHOR]

There is an issue which often emerges whenever nearing an election campaign – the fear of an ‘election year economics’ and the damage it brings. The fear is that the government will implement policies aimed at ‘benefiting the people’ in order to win re-election, such as increasing public expenditures, introducing tax cuts, raising salaries, etc. These actions, however, benefit the people only in the short term. Over the long run they may cause great damage as they force governments to borrow or print money, or to choose another route, of tax increases or government budget cuts, to be applied soon after the elections. Both options demonstrate how election economics can be seen as something akin to a ‘bribe’ given to voters, which damages not only the economy, but the entire political culture as well. Thus, it is interesting to examine whether there is an election economy in Israel. The article covers the three decades from 1982 to 2010. The findings show that during this period, the use of election economics in Israel decreased, and that in recent campaigns it seems to have completely disappeared. [ABSTRACT FROM AUTHOR]