Political Budget Cycles in Papua New Guinea

Author/Editor: Faal, Ebrima
Publication Date: September 01, 2007
Summary: This paper assesses the presence of opportunistic electoral budget cycles in Papua New Guinea. Using quarterly time series data, a clear pattern emerges of pre-election manipulations of fiscal policy by incumbent governments, mainly in the form of increased development spending and overall primary expenditure, followed in some cases by retrenchment in post-election periods. These findings are consistent with the predictions of rational opportunistic political business cycle theory. It is noteworthy that revenue was not statistically significantly related to elections, either in the pre- or post-election period. In this regard, electoral swings in fiscal deficits reflect a preference for influencing expenditures rather than taxation.
Subject(s): Government expenditures | Papua New Guinea | Budget deficits | Business cycles | Political economy

Author's Keyword(s): Economic cycles | fiscal policy | politics | Papua New Guinea
Publication Date: September 01, 2007
Format: Paper
Stock No: WPIEA2007219 Pages: 16
US$18.00 (Academic Rate:
US$18.00 )
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