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Political Budget Cycles in Papua New Guinea

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  • Mr. Ebrima A Faal

Abstract

This paper assesses the presence of opportunistic electoral budget cycles in Papua New Guinea. Using quarterly time series data, a clear pattern emerges of pre-election manipulations of fiscal policy by incumbent governments, mainly in the form of increased development spending and overall primary expenditure, followed in some cases by retrenchment in post-election periods. These findings are consistent with the predictions of rational opportunistic political business cycle theory. It is noteworthy that revenue was not statistically significantly related to elections, either in the pre- or post-election period. In this regard, electoral swings in fiscal deficits reflect a preference for influencing expenditures rather than taxation.

Suggested Citation

  • Mr. Ebrima A Faal, 2007. "Political Budget Cycles in Papua New Guinea," IMF Working Papers 2007/219, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2007/219
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    References listed on IDEAS

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    Cited by:

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    2. Fi̇li̇z Eryilmaz & Mehmet Mercan, 2015. "Political Budget Cycles: Evidence From Turkey," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 2, pages 5-14, April.

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