Vliv informovanosti voličů na politicko-rozpočtové cykly

Abstract

The topic of this dissertation is the existence of the political budget cycle. A political budget cycle is a cycle which is observable in the fiscal policy instruments – in the budget balance, revenues or expenditures. This cycle is induced by an electoral cycle. The main aim of the dissertation is to test whether a political budget cycle (PBC) exists in the developed countries (OECD), and whether it depends on the awareness of voters – how well-informed they are. A specific testable hypothesis is derived from the theoretical model of the political budget cycle, which is designed for this purpose earlier in our thesis. It postulates that lower awareness of voters will lead to a more pronounced political budget cycle. Chapter 4 provides the empirical results, using data for OECD countries from the 1995 – 2014 period. A dynamic linear regression model is used for that purpose, and in particular the Arellano-Bond GMM estimator. Chapter 5 contains our policy implications and recommendations. A special attention is given to an unconventional one of levying a special ‘deficit tax’ that would be imposed on all adult individuals. The main conclusion of the dissertation thesis is to show that there is a strong political budget cycle in countries with a lower level of voters’ awareness. They experience a higher budget deficit at the time of elections than during non-election years. Quantitatively, budget deficit increases by 0.7 % GDP at the time of the elections, primarily through increasing government expenditures, and this gets reversed in the post-election period. A similar cycle was not found in countries in which voters were well-informed. Our results are shown to be robust to a number of alternative specification and robustness tests.