Treated Politicians, Treated Voters: A Natural Experiment of Political Budget Cycles

60 Pages Posted: 1 Aug 2011 Last revised: 2 Mar 2020

See all articles by Kentaro Fukumoto

Kentaro Fukumoto

Gakushuin University

Yusaku Horiuchi

Dartmouth College - Department of Government

Shoichiro Tanaka

Gakushuin University

Date Written: February 29, 2020

Abstract

Although pre-electoral political manipulation of the budget --- the political budget cycle (PBC) --- has been long investigated by scholars, empirical findings are mixed at best. This is partly because of the non-random nature of election timing. There also exist ongoing debates over \emph{how} the budget is manipulated for electoral purposes. We address these issues by exploiting a natural experiment in Japan, where the timing of both executive and legislative elections in municipalities is fixed, staggered, and as good as random, and by using the detailed items of the municipal budget. We find that total and capital expenditures follow the PBC, but tax revenue does not. We also find that executive elections are associated with the PBC, but legislative elections are not. Against the conventional wisdom that democratic or developed countries are free from the PBC, our case of Japan offers an intriguing exception.

Keywords: political budget cycle; natural experiment; Japan; municipality; election timing; ignorability

JEL Classification: H71, H72, D72, E62, P16

Suggested Citation

Fukumoto, Kentaro and Horiuchi, Yusaku and Tanaka, Shoichiro, Treated Politicians, Treated Voters: A Natural Experiment of Political Budget Cycles (February 29, 2020). Available at SSRN: https://ssrn.com/abstract=1902724 or http://dx.doi.org/10.2139/ssrn.1902724

Kentaro Fukumoto (Contact Author)

Gakushuin University ( email )

1-5-1 Mejiro
Toshima-ku Tokyo 171-8588
Japan

HOME PAGE: http://www-cc.gakushuin.ac.jp/~e982440/index_e.htm

Yusaku Horiuchi

Dartmouth College - Department of Government ( email )

204 Silsby Hall
HB 6108
Hanover, NH 03755
United States

HOME PAGE: http://sites.dartmouth.edu/horiuchi/

Shoichiro Tanaka

Gakushuin University ( email )

1-5-1 Mejiro
Toshima-ku Tokyo 171-8588
Japan

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
42
Abstract Views
473
PlumX Metrics