Opportunistic Political Cycles: Test in a Young Democracy Setting

36 Pages Posted: 30 May 2003

See all articles by Akhmed Akhmedov

Akhmed Akhmedov

Center for Economic and Financial Research (CEFIR)

Alexei Ravichev

Center for Economic and Financial Research (CEFIR); Indiana University Purdue University Indianapolis (IUPUI)

Ekaterina Zhuravskaya

Paris School of Economics (PSE)

Multiple version iconThere are 3 versions of this paper

Date Written: April 2003

Abstract

Despite the fact that theoretical research on opportunistic political cycles is very intuitive and well developed, empirical literature has found fairly weak evidence of opportunistic political cycles. This Paper tests the theory in a decade-old democracy - Russia. We find strong evidence of very short opportunistic political cycles and provide evidence and explanation why many previous attempts to find evidence failed. Using a comprehensive list of Russia's regional elections and regional monthly panel data between 1996 and 2001, we find that: (1) opportunistic political cycles in regional fiscal policies are sizable and short-lived on average; (2) the magnitude of opportunistic cycles decreases with voters' rationality and awareness (measured by urbanization, computerization, education, and freedom of media); (3) there is a learning curve for voters: cycles become smaller with time; (4) cycles in fiscal policies increase political popularity and the re-election chances of incumbent governors. Our results confirm that maturity of democracy as well as rationality and awareness of the electorate are very important factors in determination of the scope for opportunistic cycles.

Keywords: Opportunistic political business cycles, maturity of democracy, rationality, Russia, fiscal policy

JEL Classification: E32, H72, P16, P35

Suggested Citation

Akhmedov, Akhmed and Ravichev, Alexei and Zhuravskaya, Ekaterina, Opportunistic Political Cycles: Test in a Young Democracy Setting (April 2003). CEPR Discussion Paper No. 3855. Available at SSRN: https://ssrn.com/abstract=412581

Akhmed Akhmedov (Contact Author)

Center for Economic and Financial Research (CEFIR) ( email )

47 Nakhimovsky Prospect, Office #720
117418 Moscow
Russia
+7 09 5332 4083 (Phone)

Alexei Ravichev

Center for Economic and Financial Research (CEFIR) ( email )

47 Nakhimovsky Prospect, Office #720
117418 Moscow
Russia
+7 09 5005 5002 (Phone)
+7 09 5005 5003 (Fax)

Indiana University Purdue University Indianapolis (IUPUI) ( email )

1309 E. 10th St.
Bloomington, IN 47405
United States

Ekaterina Zhuravskaya

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

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