No: ERAD-98-06 Author:
Ludger Schuknecht
World Trade Organization
Manuscript date:
June 1998
Abstract Back to top
The paper studies empirically the fiscal policy
instruments by which governments try to influence election outcomes in 24 developing
countries for the 1973-1992 period. The study finds that the main vehicle for expansionary
fiscal policies around elections is increasing public expenditure rather than lowering
taxes, and public investment cycles seem particularly prominent. Institutional mechanisms
which constrain discretionary expenditure policies and which strengthen fiscal control are
therefore worthwhile considering to prevent opportunistic policy making around
elections.
Keywords Back
to top
Elections, political business cycles, fiscal
policies, public expenditure, developing countries.
JEL codes: [F4], [E62], [H62]
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