Political budget cycles and media freedom

Veiga, Francisco Jos�; Veiga, Linda Gon�alves; Morozumi, Atsuyoshi

Abstract

This paper examines the effects of elections on the conduct of central governments' fiscal policies. To do so, it uses a unique panel database that includes disaggregated spending and revenue series at the central government level for multiple countries over the 1975–2010 period. Examining political environments under which incumbent governments generate political budget cycles (PBCs), and comparing the relative importance of factors influencing cycles, we identify media freedom as the factor that plays the most critical role. This result provides a micro-foundation for rational opportunistic models for PBCs that rely on asymmetry of information about politicians' competence, and also offers a way to relate different conditioning factors of PBCs, including fiscal transparency and the maturity of democracies. Further, we show that the election-year rise in budget deficits under low media freedom is primarily driven by an increase in the current, not capital, component of public expenditure.

Citation

Veiga, F. J., Veiga, L. G., & Morozumi, A. (2017). Political budget cycles and media freedom. Electoral Studies, 45, https://doi.org/10.1016/j.electstud.2016.11.008

• Journal Article Type: Article
• Acceptance Date: Nov 2, 2016
• Online Publication Date: Nov 16, 2016
• Publication Date: Feb 1, 2017
• Deposit Date: Feb 1, 2017
• Publicly Available Date: Feb 1, 2017
• Journal: Electoral Studies
• Print ISSN: 0261-3794
• Electronic ISSN: 0261-3794
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 45
• DOI: https://doi.org/10.1016/j.electstud.2016.11.008
• Keywords: Political budget cycles; Central government; Voter information; Media freedom; Fiscal policy composition
• Public URL: https://nottingham-repository.worktribe.com/output/837750
• Publisher URL: http://www.sciencedirect.com/science/article/pii/S0261379416301792