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Behavioral and Institutional Determinants of Political Business Cycles

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  • Baleiras, Rui Nuno
  • Santos, Vasco

Abstract

The link between business cycles and the democratic political system has long been recognized by economists. However, the determinants of political business cycles are not well understood. We discuss several institutional and behavioral determinants of those cycles, such as revolving-door appointments, term limits and preferences of the incumbent politician, electorate and business community concerning the intertemporal pattern of public expenditure. We show how they affect the cycle's amplitude in the context of a rational-expectations model. Copyright 2000 by Kluwer Academic Publishers

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  • Baleiras, Rui Nuno & Santos, Vasco, 2000. "Behavioral and Institutional Determinants of Political Business Cycles," Public Choice, Springer, vol. 104(1-2), pages 121-147, July.
    • Handle: RePEc:kap:pubcho:v:104:y:2000:i:1-2:p:121-47
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    1. Ricardo Duque Gabriel, 2020. "Who should you vote for? Empirical evidence from Portuguese local governments," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 19(1), pages 5-31, January.
    2. Rui Nuno Baleiras & Jose da Silva Costa, 2001. "To be or not to be in office again, that is the question: political business cycles with local governments," Nova SBE Working Paper Series wp402, Universidade Nova de Lisboa, Nova School of Business and Economics.
    3. Rui Nuno Baleiras & Vasco Santos, 2003. "On the Likelihood and Welfare Effects of “Stop–and–go” Policies," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 5(1), pages 121-133, January.
    4. Eric Dubois, 2016. "Political Business Cycles 40 Years after Nordhaus," Post-Print hal-01291401, HAL.
    5. Michelson, Noam, 2023. "The revolving door of former civil servants and firm value: A comprehensive approach," European Journal of Political Economy, Elsevier, vol. 79(C).
    6. Nie, Huihua & Jiang, Minjie & Wang, Xianghong, 2013. "The impact of political cycle: Evidence from coalmine accidents in China," Journal of Comparative Economics, Elsevier, vol. 41(4), pages 995-1011.
    7. Eric Dubois, 2016. "Political business cycles 40 years after Nordhaus," Public Choice, Springer, vol. 166(1), pages 235-259, January.
    8. Baleiras, Rui Nuno & da Silva Costa, Jose, 2004. "To be or not to be in office again: an empirical test of a local political business cycle rationale," European Journal of Political Economy, Elsevier, vol. 20(3), pages 655-671, September.
    9. Eric Dubois, 2016. "Political Business Cycles 40 Years after Nordhaus," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01291401, HAL.

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