Alesina, Alberto; Campante, Filipe R.; Tabellini, Guido - In: Journal of the European Economic Association 6 (2008) 5, pp. 1006-1036
Fiscal policy is procyclical in many developing countries. We explain this policy failure with a political agency … demand more public goods or lower taxes, and this induces a procyclical bias in fiscal policy. The empirical evidence is … consistent with this explanation: Procyclicality of fiscal policy is more pronounced in more corrupt democracies. (JEL: E62, D73 …