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Legislative budget cycles
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Legislative budget cycles

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  • Cameron Shelton

Abstract

Recent literature suggests that electoral budget cycles are a phenomenon of new rather than established democracies. What part of the democratization process explains the amelioration of the political budget cycle? We argue the answer lies (in part) in the development of a strong party system. We extend the classic Rogoff-Siebert model to show that political budget cycles are possible in a legislative context with rational voters. We then demonstrate that the development of a strong party system can restrain political budget cycles in a majoritarian electoral system. Finally, we follow prior work in using vote share volatility as a measure of the institutionalization of the party system. Using newly collected vote-share data for 433 elections for 90 democracies from 1980–2007, we calculate a measure of party institutionalization. We then use this data to demonstrate that institutionalized party systems are associated with mitigated political budget cycles, especially in majoritarian electoral systems. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Cameron Shelton, 2014. "Legislative budget cycles," Public Choice, Springer, vol. 159(1), pages 251-275, April.
    • Handle: RePEc:kap:pubcho:v:159:y:2014:i:1:p:251-275
    DOI: 10.1007/s11127-012-0043-9
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    Cited by:

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    2. Fabio Padovano & Pauline Mille, 2022. "Education, fake news and the PBC," Economics Working Paper from Condorcet Center for political Economy at CREM-CNRS 2022-01-ccr, Condorcet Center for political Economy.
    3. Fabio Padovano & Pauline Mille, 2023. "Education, fake news and the Political Budget Cycle," Economics Working Paper from Condorcet Center for political Economy at CREM-CNRS 2023-01-ccr, Condorcet Center for political Economy.
    4. Endrit Lami, 2023. "Political Budget Cycles in the Context of a Transition Economy: The Case of Albania," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 65(2), pages 221-262, June.
    5. Linda G. Veiga & Georgios Efthyvoulou & Atsuyoshi Morozumi, 2018. "Political Budget Cycles: Conditioning Factors and New Evidence," NIPE Working Papers 21/2018, NIPE - Universidade do Minho.
    6. Antoine Cazals & Pierre Mandon, 2015. "Political Budget Cycles: Manipulation of Leaders or Bias from Research? A Meta-Regression Analysis," Working Papers halshs-01238883, HAL.
    7. Antoine CAZALS & Pierre MANDON, 2016. "Political Budget Cycles: Manipulation from Leaders or Manipulation from Researchers? Evidence from a Meta-Regression Analysis," Working Papers 201609, CERDI.
    8. Antoine Cazals & Pierre Mandon, 2016. "Political Budget Cycles: Manipulation from Leaders or Manipulation from Researchers? Evidence from a Meta-Regression Analysis," Working Papers halshs-01320586, HAL.
    9. Sharlywest Uwabor Eboigbe & Innocent Okwuosa, 2018. "Test of Linkage between Governance Style and National Economic Indices," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 9(1), pages 226-238, January.
    10. Eric Dubois, 2016. "Political Business Cycles 40 Years after Nordhaus," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01291401, HAL.
    11. Eric Dubois, 2016. "Political Business Cycles 40 Years after Nordhaus," Post-Print hal-01291401, HAL.
    12. Findley, T. Scott, 2015. "Hyperbolic memory discounting and the political business cycle," European Journal of Political Economy, Elsevier, vol. 40(PB), pages 345-359.
    13. Antoine Cazals & Pierre Mandon, 2015. "Political Budget Cycles: Manipulation of Leaders or Bias from Research? A Meta-Regression Analysis," CERDI Working papers halshs-01238883, HAL.
    14. Stéphane Goutte & David Guerreiro & Bilel Sanhaji & Sophie Saglio & Julien Chevallier, 2019. "International Financial Markets," Post-Print halshs-02183053, HAL.

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    More about this item

    Keywords

    Political budget cycles; Party institutionalization; H6; D72;
    All these keywords.

    JEL classification:

    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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