Political Budget Cycles in Papua New Guinea

 
Author/Editor: Faal, Ebrima
 
Publication Date: September 01, 2007
 
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
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.
 
Series: Working Paper No. 07/219
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
 
English
Publication Date: September 01, 2007
Format: Paper
Stock No: WPIEA2007219 Pages: 16
Price:
US$18.00 (Academic Rate:
US$18.00 )
 
 
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