Elections and Allocation of Public Expenditures

Authors

1 Assistant Professor of Economics, Shahid Chamran University of Ahvaz

2 M. A. Student in Economics, Shahid Chamran University of Ahvaz

Abstract

  Political processes are of the most efficient methods for individuals to reveal their preferences publicly. Election is one of the most significant political processes. Nowadays, the role of effective factors, particularly governments, on elections is a major issue among scholars and experts. The purpose of this paper is to examine changes in public spending as means of governmental policy in elections. This paper investigates the effects of elections on allocations of public expenditure over the period of 1980-2010 for D8 countries using panel data approach. Experimental results show that in the years approaching to elections, a considerable increase in current expenditures and a decrease in capital expenditures occur and also the existence of high incomes from natural resources lead to larger political cycles. On the other hand, greater ratios for informed voters lead to decrease of distortions in allocation of public spending toward current expenditures.  

Keywords

Journal of Econometric Modelling
Volume 1, Issue 1 - Serial Number 1
October 2014
Pages 75-95

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