Publication detail

Electoral Cycles in Public Expenditures: Evidence from Czech Local Governments

Author(s): PhDr. Lenka Šťastná Ph.D.,
Type: IES Working Papers
Year: 2015
Number: 28
ISSN / ISBN:
Published in: IES Working Papers 28/2015
Publishing place: Prague
Keywords: political cycle, local government expenditures, municipalities
JEL codes: H72, D72, R50
Suggested Citation: Stastna L. (2015). “Electoral Cycles in Public Expenditures: Evidence from Czech Local Governments” IES Working Paper 28/2015. IES FSV. Charles University.
Abstract: This paper analyzes local political cycle in Czech municipalities over the period between 1997 and 2013. We apply the system GMM and the difference GMM estimators to identify distortion in current and capital expenditures per capita in electoral and pre-electoral years, while focusing on various spending groups (infrastructure, leisure, housing, education, etc.). We also test specific effects of local governments' characteristics (partisanship, strength, experience). In general, municipalities increase capital spending (primarily on infrastructure, housing, leisure activities) and decrease current spending (administration) before elections. Rightist governments target leisure activities and save more on administration, whereas leftist governments target current spending on social services. Stronger governments and those with newly elected mayors have lower incentive to create an electoral cycle. Voters' involvement in local policies and also success of ruling local (and parliamentary) parties in national parliamentary elections diminish local electoral cycles.
Downloadable: wp_2015_28_stastna

Partners

Deloitte

Sponsors

CRIF
McKinsey
Patria Finance