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Democratic learning and fiscal rules in the political budget cycles of the CEE countries

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  • Nadezda Stanova

Abstract

Political economy literature acknowledges the importance of democratic learning and of fiscal rules in preventing politically driven deficits. This paper investigates the role of these factors for the Political Budget Cycles in the ten Central and East European (CEE) countries from 1990 to 2010. Detailed information on democratic parliamentary elections is combined with quantitative data on the strength of the fiscal rules. Results of dynamic panel regressions show that with the increasing democratic experience of the voters the opportunistic budget cycle has dampened. Moreover, there is empirical support for the view that strengthening fiscal rules somewhat reduced the scope for opportunistic manipulations. On the other hand, consolidation episodes did not preclude politically driven cycles.

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  • Nadezda Stanova, 2012. "Democratic learning and fiscal rules in the political budget cycles of the CEE countries," International Journal of Economic Policy in Emerging Economies, Inderscience Enterprises Ltd, vol. 5(2), pages 168-182.
    • Handle: RePEc:ids:ijepee:v:5:y:2012:i:2:p:168-182
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    Cited by:

    1. Ademmer, Esther & Dreher, Ferdinand, 2014. "Institutional constraints to political budget cycles in the enlarged EU," Kiel Working Papers 1964, Kiel Institute for the World Economy (IfW Kiel).
    2. Yuriy Bilan & Wadim Strielkowski, 2016. "Migration in post-transition economies: immigration surplus in Visegrad group countries," International Journal of Trade and Global Markets, Inderscience Enterprises Ltd, vol. 9(2), pages 182-196.
    3. Esther Ademmer & Ferdinand Dreher, 2016. "Constraining Political Budget Cycles: Media Strength and Fiscal Institutions in the Enlarged EU," Journal of Common Market Studies, Wiley Blackwell, vol. 54(3), pages 508-524, May.

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