This article tests for the existence of rational political business cycles models using a large and unexplored data set of Portuguese municipalities. The data set is well-suited for this purpose because it provides a high level of detail on expenditure items, because Portuguese municipalities...

The paper analyzes political business cycles in Russian regions, their magnitude, duration, focus on specific policy instruments and groups of voters, effectiveness in increasing chances for reelection, and dependence on voters' rationality and access to information. Using the comprehensive list...

This paper tests the theory of opportunistic cycles in a decade-old democracy, Russia, finds strong evidence of cycles, and provides explanation for why previous literature often found weaker evidence. Using the comprehensive list of Russia's regional elections and regional monthly panel data...

The literature on political business cycles follows two analytical conventions: (1) polity is reasonably reduced to a single agent who is either opportunistic or partisan and (2) economy is an equilibrated entity that is subject to politically inspired shocks. This paper pursues a different...

We argue that when fiscal policy is endogenously determined, the incentives of redistributive politics associated with its formulation can endogenously add to the uncertainty and volatility that an economy faces. In particular, small shocks may get translated into large fluctuations. Our...

The literature on electoral cycles has developed in two distinct phases. The first one considered the existence of non-rational (naive) voters whereas the second one considered fully rational voters. In our perspective, an intermediate approach is more interesting, i.e. one that considers...

Müller (2023) presents evidence for electoral cycles in macroprudential policy in a sample of 58 countries from 2000 through 2014. Consistent with theoretical arguments, the pattern of looser regulation is larger when election outcomes are uncertain and institutions are weak. In this...

One of the most crucial lessons to be taken from the literature on electoral business cycles is that the short- run electorally-induced fluctuations prejudice the long-run welfare. Since the very first studies on the matter, some authors offered suggestions as to what should be done against this...

This paper studies the relation between the evolution of capital controls and electoral cycles. We exploit a dataset containing detailed information on the level of restrictions on capital flows for 98 countries on an annual base from 1995 to 2015, constructed by Fernandez et al. (2016). First,...

The political budget cycle (PBC) literature argues that governments expand deficits in election years. However, what happens when an economic downturn is expected? Will the government allow the deficit to expand even further, or will it resort to spending cuts and tax increases? When voters...