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Elections, leaders, and the composition of government spending

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  • Brender, Adi
  • Drazen, Allan

Abstract

Do elections allow voters to express their policy preferences, with change in government spending patterns following the election of a new leader? How long does it take for the composition of government spending to change following a change in leadership? Or, do significant spending changes precede (rather than follow) elections, with incumbents using significant changes in spending composition as an electoral tool? Using a dataset we created on government expenditure composition in 71 democracies over 1972–2009, we examine the relation between elections and significant changes in the composition of government spending. We find that leaders' replacements have no significant short-run effect on expenditure composition, even after controlling for various political and economic variables. Over the medium-term leadership changes are associated with larger changes in expenditure composition, but only in developed countries. We also find that election years are associated with larger expenditure composition changes in established democracies, but not in new democracies, which were found in our previous work to increase their overall level of expenditures in election years.

Suggested Citation

  • Brender, Adi & Drazen, Allan, 2013. "Elections, leaders, and the composition of government spending," Journal of Public Economics, Elsevier, vol. 97(C), pages 18-31.
    • Handle: RePEc:eee:pubeco:v:97:y:2013:i:c:p:18-31
    DOI: 10.1016/j.jpubeco.2012.08.011
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    More about this item

    Keywords

    Budget; Leaders; Economic policy; Fiscal policy; Expenditure composition;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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