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Fiscal Forecast Manipulations and Electoral Results: Evidence from Portuguese Municipalities

Author

Listed:
  • Mamadou Boukari

    (Laboratoire de Recherche en Sciences Économiques et de Gestion (LaRSEG), Université de Kara)

  • Francisco José Veiga

    (University of Minho and NIPE)

Abstract

This paper aims to evaluate the impact of budget forecast manipulations on election results using a sample that covers all 308 Portuguese municipalities over the period running from 1998 to 2017. The results reveal that incumbent mayors overestimate revenues and expenditures. Overstating the budget more on the revenue side, they end up with a deficit. We check whether this opportunistic behavior is electorally benefcial. The results provide little or no evidence that election-year manipulations of revenue forecasts affect the vote shares of the parties of the incumbent mayors. On the other hand, the opportunistic management of total and capital expenditure forecasts pays off, which is consistent with previous results for Portugal indicating that increased total and, mainly, capital expenditures lead to higher vote shares.

Suggested Citation

  • Mamadou Boukari & Francisco José Veiga, 2020. "Fiscal Forecast Manipulations and Electoral Results: Evidence from Portuguese Municipalities," NIPE Working Papers 07/2020, NIPE - Universidade do Minho.
    • Handle: RePEc:nip:nipewp:07/2020
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    More about this item

    Keywords

    Budget Forecast Errors; Elections; Municipalities; Portugal;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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