Political Expenditure Cycle in V4 Countries
Public expenditure subjects to government and its volume and structure is influenced by decisions of government according to activities and fiscal policies realized. Political expenditure cycles could also act as one of potential public expenditure determinant and could influence the public expe...
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| Main Author: | |
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| Format: | Article |
| Language: | English |
| Published: |
NGO “Economic Laboratory for Transition Research” (ELIT)
2018-08-01
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| Series: | Montenegrin Journal of Economics |
| Subjects: | |
| Online Access: | http://repec.mnje.com/mje/2018/v14-n03/mje_2018_v14-n03-a22.pdf |
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| Summary: | Public expenditure subjects to government and its volume and
structure is influenced by decisions of government according to
activities and fiscal policies realized. Political expenditure cycles
could also act as one of potential public expenditure determinant
and could influence the public expenditure volume and structure.
The paper examines whether the political expenditure cycle is present
in V4 countries at the central level of government considering
the opportunistic approach. Variance of central government expenditure
indicates the presence of changes in the central government
total expenditure and in its sub-categories defined according
to government functions, while the analysis of their dynamics in
connection with parliamentary election brings only vague results.
After, the OLS model is estimated for each V4 country for the period
1995-2015. Results of estimations present certain statistically
significant impact of election period on the central government total
expenditure. As the monitored time-series cover the period of the
financial crisis, models were tested for the structural break. Augmented
regressions were re-estimated. Results point to cases, when
election variables meet the hypothesis about the opportunistic
behaviour of central government. Additionally, prevalent part of
results shows opposite behaviour of the central government before
and after the financial crisis. However, observed results do not allow
generalizing the opportunistic model to all V4 post-communist countries,
because statistically significant opposite effects of tested
hypothesis are also observed.. |
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| ISSN: | 1800-5845 1800-6698 |