Political Budget Cycles and the Organization of Political Parties

44 Pages Posted: 20 Apr 2016

See all articles by Marek Hanusch

Marek Hanusch

University of Oxford

Philip Keefer

Inter-American Development Bank

Date Written: October 1, 2013

Abstract

This paper introduces a new explanation for political budget cycles: politicians have stronger incentives to increase spending around elections in the presence of younger political parties. Previous research has shown that political budget cycles are larger when voters are uninformed about politician characteristics and when politicians are less credible. The effects of party age can be traced to organizational differences between younger and older parties that also affect voter information and politician credibility. Parties organized around particular individuals, rather than around policy labels or a party machine, are less likely to survive the departure of party leaders, to adopt organizational attributes that promote voter information and political credibility, and to limit political budget cycles. Previous research has also shown larger political budget cycles in younger democracies. Evidence presented here indicates that party age accounts for this effect.

Keywords: Civic Participation and Corporate Governance, Politics and Government, Political Systems and Analysis, Public Sector Expenditure Policy, Consumption

Suggested Citation

Hanusch, Marek and Keefer, Philip, Political Budget Cycles and the Organization of Political Parties (October 1, 2013). World Bank Policy Research Working Paper No. 6654, Available at SSRN: https://ssrn.com/abstract=2340780

Marek Hanusch (Contact Author)

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Philip Keefer

Inter-American Development Bank ( email )

1300 New York Ave., NW
Washington, DC 20577
United States
202-623-1961 (Phone)

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