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Younger parties, bigger spenders? Party age and political budget cycles

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  • Hanusch, Marek
  • Keefer, Philip

Abstract

We identify a new explanation for political budget cycles (PBCs): politicians have stronger incentives to increase spending around elections in the presence of younger political parties. Previous research suggests that PBCs should be larger when voters are uninformed about politician characteristics and politicians are less credible. Research on political parties suggests that older parties are more likely to attenuate problems of both information and credible commitment. The effects of party age are robust to controls for numerous other political characteristics of countries. In particular, the arguments and evidence here illuminate a mechanism underlying recent robust findings that PBCs are larger in younger democracies: party age fully accounts for these effects.

Suggested Citation

  • Hanusch, Marek & Keefer, Philip, 2014. "Younger parties, bigger spenders? Party age and political budget cycles," European Economic Review, Elsevier, vol. 72(C), pages 1-18.
  • Handle: RePEc:eee:eecrev:v:72:y:2014:i:c:p:1-18
    DOI: 10.1016/j.euroecorev.2014.08.003
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