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Budget Manipulation and Vertical Fiscal Imbalance

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  • Meloni, Osvaldo

Abstract

Evidence of Political Budget Cycles from cross-countries studies has been rationalized as coming from voter’s cost to process available information and asymmetric information. This explanation was also adopted in most cross-province studies leaving aside variables related to the incentive structure of fiscal federalism. This paper investigates electorally-induced fiscal fluctuations in Argentina for the period 1985-2007. Province –level dynamic panel data reveals that vertical fiscal imbalances in subnational districts fuel fiscal expansion and changes in expenditure composition, favoring current expenditure in detriment of investment, in election years.

Suggested Citation

  • Meloni, Osvaldo, 2011. "Budget Manipulation and Vertical Fiscal Imbalance," MPRA Paper 50694, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:50694
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    References listed on IDEAS

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    Cited by:

    1. Meloni, Osvaldo, 2012. "Is there an electoral-motivated crime rate cycle? Evidence from Argentina," MPRA Paper 40177, University Library of Munich, Germany.

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    More about this item

    Keywords

    Political Budget Cycle; Vertical Fiscal Imbalance; Opportunism; Argentina;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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