Electoral Budget Cycles and Strategic Use of Debt : An Empirical Investigation for Swiss Municipalities
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no fulltext attached
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From a public choice perspective, the impact of elections on
politicians' behavior is of particular interest. Using a panel data
set of the 20 largest Swiss cities from 1977 to 2007, this book
analyzes whether opportunistic spending behavior around elections is
less pronounced if citizens can directly influence fiscal decisions.
More specifically, it is being tested whether the presence of
mandatory fiscal referenda mitigates electoral budget cycles and the
strategic use of debt. The econometric analysis suggests that there
is only weak evidence for an electoral budget cycle or strategic use
of debt as such. This result is not surprising, since coalition
governments are a central feature of Swiss politics. Therefore, both
benefits as well as losses related to a change in majority are
limited - which reduces the incentive to engage in unsustainable
policies for re-election motives. The results further indicate that
local public debt is responsive to autocorrelation and business
cycle effects. A reduced share of intergovernmental grants is
associated with lower deficits. The coalition size and the share of
leftist parties in the parliament do not significantly affect local
debt.
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type
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book (English)
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keywords
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Electoral Budget Cycle, Strategic Use of Debt, Public Choice, Direct Democracy, Fiscal Sustainability, Public Debt, Federalism, Consensus Democracy
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date of appearance
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2011
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publisher
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AV Akademikerverlag (Saarbrücken)
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ISBN
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978-3-639-38341-6
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page(s)
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92
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profile area
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SEPS - Economic Policy
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citation
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Gerritzen, B. (2011). Electoral Budget Cycles and Strategic Use of
Debt: An Empirical Investigation for Swiss Municipalities.
Saarbrücken: AV Akademikerverlag. - ISBN 978-3-639-38341-6.
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