TY - JOUR

T1 - Polity age and political budget cycles

T2 - Evidence from a Danish municipal reform

AU - Aaskoven, Lasse

PY - 2018

Y1 - 2018

N2 - Incumbent incentive for competence-signaling and lack of voter information are generally thought to be factors that increase the prevalence of political budget cycles. These mechanisms should be more prevalent in new political units. Since the creation of new political units is rarely exogenous, however, serious endogeneity issues would be an issue for empirical studies of this subject. To overcome these problems, I use a Danish local government reform—which amalgamated some (but not all) Danish municipalities, thereby creating new political units—in a way that is arguably quasi-experimental to study whether political budget cycles are larger in new political units. Contrary to theoretical predictions, political budget cycles seem to be of a smaller scale in the new municipalities, but only regarding budget cycles in budgetary overruns. The findings are of wider interest for discussions about the mechanisms behind context-conditional political budget cycles.

AB - Incumbent incentive for competence-signaling and lack of voter information are generally thought to be factors that increase the prevalence of political budget cycles. These mechanisms should be more prevalent in new political units. Since the creation of new political units is rarely exogenous, however, serious endogeneity issues would be an issue for empirical studies of this subject. To overcome these problems, I use a Danish local government reform—which amalgamated some (but not all) Danish municipalities, thereby creating new political units—in a way that is arguably quasi-experimental to study whether political budget cycles are larger in new political units. Contrary to theoretical predictions, political budget cycles seem to be of a smaller scale in the new municipalities, but only regarding budget cycles in budgetary overruns. The findings are of wider interest for discussions about the mechanisms behind context-conditional political budget cycles.

KW - Faculty of Social Sciences

KW - Political budget cycles

KW - Conditional political budget cycles

KW - Local government budget

KW - Budgetary overruns

KW - Quasi-experiment

KW - Local government reform

UR - https://www.sciencedirect.com/science/article/pii/S0176268016302403

U2 - /10.1016/j.ejpoleco.2017.05.002

DO - /10.1016/j.ejpoleco.2017.05.002

M3 - Journal article

VL - 52

SP - 75

EP - 84

JO - European Journal of Political Economy

JF - European Journal of Political Economy

SN - 0176-2680

ER -