Political Budget Cycle: Mexican Town Halls Case

Authors

  • Edgar Alfredo Nande Vazque Universidad de Colima
  • Juan Carlos Martínez University of Sonora. Emai: martinez@pitic.uson.mx

DOI:

https://doi.org/10.18533/ijbsr.v6i8.978

Keywords:

Elections, political budget cycle, public spending.

Abstract

In the current economic context, one of the issues of concern is the growth of public spending of municipalities of Mexico and thus increasing public debt. This combines the traditional interest that literature has been devoted to the relationship between economics and politics from the perspective of Political Budget Cycle. The aim of this paper is to analyze the effect of elections in public expenditure management. To this end, a system based on the Generalized Method of Moments (GMM), which uses instrumental variables based on delays and differences of all variables in the model estimator was used. Our findings indicate that there is an expansion of total expenditure, spending on public works and infrastructure and current expenditure contracted work, indicating the preference of politicians for using investment spending to influence voter behavior. The work also notes that citizens value the policies of public expenditure management when making their voting decisions.

Author Biography

Juan Carlos Martínez, University of Sonora. Emai: martinez@pitic.uson.mx

Accounting

References

Aidt, T. S., Veiga, F. J., y Veiga, L. G. (2011). Election results and opportunistic policies: a new test of the rational political business cycle model.Public Choice, 148(1-2), 21-44.

Arellano, M., y Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The review of economic studies, 58(2), 277-297.

Benito, B., Vicente, C. y Bastida, F. (2013). Transparency and political budget cycles at municipal level. Swiss Political Science Review, 19(2), 139-156.

Brender, A., y Drazen, A. (2003). Where does the political budget cycle really come from?. Social Science Research Network. CEPR Discussion Paper No. 4049.

--------- (2005). Political budget cycles in new versus established democracies. Journal of Monetary Economics, 52(7), 1271-1295.

Brusca A., I., y Montesinos, V. (2005). The usefulness of local government financial reporting for citizens. Workshop of the CIGAR, St. Gallén.

---------- (2006). Are citizens significant users of government financial information? Public Money and Management, 26(4), 205-209.

Brusca A., I., Labrador, M., y Montesinos, V. (2010). Elections and local government management. 33rd European Accounting Association Annual Congress, Istanbul (Turquois).

Buchanan, J. M., y Tullock, G. (1962). The calculus of Consent: Logical Foundations of Constitutional Democracy. Michigan, University of Michigan: Ed. Press.

Caba P., M., Rodríguez Bolívar, M., y López Hernández, A. (2014). The determinants of government financial reports online. Transylvanian Review of Administrative Sciences, 1(42), 5-31.

Cano, M. (2001). Análisis de la fiabilidad de la información contable: La contabilidad creativa. España: Ed. Prentice Hall.

Cioffi, M., Messina, G., y Tommasino, P. (2012). Parties, institutions and political budget cycles at the municipal level. Bank of Italy Temi di Discussione (Working Paper), 885, 38.

CONAPO. (2015). Consejo Nacional de Población. Recuperado el 20 de mayo de 2015, de http://www.conapo.gob.mx/

Drazen, A. y Eslava, M. (2003). The political business cycle in Colombia on the National and Regional level, Archivos de Economía, No. 215. DNP.

---------- (2005). Electoral manipulation via expenditure composition: theory and evidence. NBER Working Paper, 11085.

---------- (2008). Electoral manipulation via voter-friendly spending: Theory and evidence. Journal of Development Economics, 92(1), 39-52.

Gámez, C., y Amarillas, V. A. (2011). Política económica o economía política: el ciclo político presupuestal en México. Cofactor, II (3), 71-96.

Gámez, C., y Botello, J. (1987). La influencia del ciclo presidencial en la economía mexicana: un ejercicio econométrico con variables dummy. El dilema de la economía mexicana: Ensayos de interpretación, Ediciones de Cultura Popular-Universidad Autónoma Metropolitana, México, 215-232.

Gámez, C., y Ibarra-Yúnez, A. (2009). El ciclo político oportunista y el gasto de los estados mexicanos. Gestión y política pública, 18(1), 39-65.

González, M. D. (2000). On elections, democracy and macroeconomic policy cycles. Department of Economics, Princeton University, Working Paper.

---------- (2002). Do changes in democracy affect the political budget cycle? Evidence from Mexico. Review of Development Economics, 6, 204-224.

Healy, P. M., y Wahlen, J. M. (1999). A review of the earnings management literature and its implications for standard setting. Accounting horizons, 13(4), 365-383.

INEGI. (2015). Instituto Nacional de Estadística y Geografía. Recuperado el 15 de mayo de 2015, de http://www.inegi.org.mx/

Montero, R. (2010). Panel dinámico. Documentos de Trabajo en Economía Aplicada. Universidad de Granada, España.

Moreno, J. C. (2007). Gasto público y elecciones: una explicación política de la asignación de los presupuestos municipales en México. Foro Internacional, 408-434.

Nordhaus, W. D. (1975). The political business cycle. The review of economic studies, 169-190.

Ramírez R., R. y Erquizio, E. A. (2012). Análisis del ciclo político electoral a partir de variables de gasto público por entidad federativa en México, 1993-2009. Revista de Economía Regional y Sectorial. 4(2), 5-27.

Rogoff, K. (1990). Equilibrium political budget cycles, American Economic Review, 80 (1), 21-36.

Rogoff, K., y Sibert, A. (1988). Elections and Macroeconomic Policy Cycles. The Review of Economic Studies, 55(1), 1-16.

---------- (2011). Opportunistic and partisan election cycles in Brazil: new evidence at the municipal level. Public Choice, 148(1-2), 233-247.

Suharnoko S., B., Kis-Katos, K., y Schulze, G. G. (2013). Political budget cycles in local Indonesia. Economics Letters, 120(2), 342-345.

Veiga, L. G., y Veiga, F. J. (2007). Political business cycles at the municipal level. Public Choice, 131(1-2), 45-64.

Vicente, C., Ríos, A. M., y Guillamón, M. D. (2013). Voting behavior and budget stability. Revista de Contabilidad, 16(1), 46-52.

Watts, R. L., y Zimmerman, J. L. (1978). Towards a positive theory of the determination of accounting standards. Accounting review, 112-134.

Downloads

Published

2016-09-01

Issue

Section

Article