Making a budget deficit attractive : the effect of endogenous voting

Several two-period models explain budget deficits as a result of a government's incentive to tie its successor's hands under the assumption that elections are exogenous. In this paper voting is endogenized with second period's voting outcome depending on the first period's government's performance. The budgetary outcome of first period's government under endogenous voting is compared to that under exogenous voting. It can be shown that endogenous voting makes a left-wing government raise deficits in an analytical framework that would lead to balanced budgets otherwise.