Transparency, political polarization, and political budget cycles in OECD countries

TY - JOUR

T1 - Transparency, political polarization, and political budget cycles in OECD countries

AU - Alt, James E.

AU - Lassen, David Dreyer

N1 - JEL Classification: D72, E62, H62

PY - 2006

Y1 - 2006

N2 - We investigate the effects of fiscal transparency and political polarization on the prevalence of electoral cycles in fiscal balance. While some 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 of many advanced industrialized economies. Using a sample of 19 OECD countries in the 1990s, 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 politically more polarized countries

AB - We investigate the effects of fiscal transparency and political polarization on the prevalence of electoral cycles in fiscal balance. While some 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 of many advanced industrialized economies. Using a sample of 19 OECD countries in the 1990s, 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 politically more polarized countries

KW - Faculty of Social Sciences

KW - fiscal transparency

KW - political budget cycles

KW - electoral cycles

KW - fiscal policy

U2 - 10.1111/j.1540-5907.2006.00200.x

DO - 10.1111/j.1540-5907.2006.00200.x

M3 - Journal article

SN - 0092-5853

VL - 50

SP - 530

EP - 550

JO - American Journal of Political Science

JF - American Journal of Political Science

IS - 3

ER -