Fiscal Policy over the Election Cycle in Low-Income Countries
IMF Working Papers, June 26, 2013
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Bibliographic details
- Authors: Christian H Ebeke, Dilan Ölcer
- Published: June 26, 2013
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475588514.001
Summary and main findings
- Focus: Low-Income Countries (LICs); investigation of fiscal-variable behavior during and after elections.
- During election years:
- Government consumption significantly increases.
- Higher fiscal deficits result from increased government consumption.
- During the two years following elections:
- Fiscal adjustment occurs through increased revenue mobilization in trade taxes.
- Cuts are concentrated in government investment.
- No significant cuts in government consumption are observed.
- Institutional mitigants:
- The presence of fiscal rules helps dampen the magnitude of the political budget cycle in LICs.
- IMF programs also help dampen the magnitude of the political budget cycle in LICs.
- Conclusion: Elections imply a macroeconomic cost when they take place and trigger a subsequent fiscal adjustment in which public investment is largely sacrificed.
Data, scope, and methods (as reported)
- New dataset used on national fiscal rules and IMF programs to assess their moderating effects on political budget cycles.
- Geographic focus includes Sub-Saharan Africa among LICs (as indicated in keywords).
Policy implications and recommendations (as reported)
- Strengthening or maintaining fiscal rules can reduce the magnitude of election-driven fiscal expansions.
- Engagement with IMF programs can help dampen political budget cycles.
- Attention needed to protect public investment during post-election fiscal adjustments to avoid long-term growth costs.
Publication and metadata
- Authors: Christian H Ebeke, Dilan Ölcer
- Publication date: June 26, 2013
- Series: Working Paper No. 2013/153
- Issue: 153
- Volume: 2013
- Pages: 24
- DOI: https://doi.org/10.5089/9781475588514.001
- Stock No: WPIEA2013153
- ISBN: 9781475588514
- ISSN: 1018-5941
- Preview citation format provided: Christian H Ebeke, and Dilan Ölcer. "Fiscal Policy over the Election Cycle in Low-Income Countries", IMF Working Papers 2013, 153 (2013), accessed 9/9/2026, https://doi.org/10.5089/9781475588514.001
IMF Working Paper — Fiscal Policy over the Election Cycle in Low-Income Countries