Political Business Cycle in the Czech Republic: Case of Municipalities

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216208%3A11230%2F16%3A10324559" target="_blank" >RIV/00216208:11230/16:10324559 - isvavai.cz</a>

Result on the web

<a href="http://dx.doi.org/10.18267/j.pep.566" target="_blank" >http://dx.doi.org/10.18267/j.pep.566</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.18267/j.pep.566" target="_blank" >10.18267/j.pep.566</a>

Result language

angličtina

Original language name

Political Business Cycle in the Czech Republic: Case of Municipalities

Original language description

The study analyses expenditures of all municipalities of the Czech Republic over the period 2003-2013. It aims to examine whether changes in municipal spending get affected by the electoral cycle. The analysis has proven that expenditures of municipalities of the Czech Republic are influenced by the political cycle. However, the political business cycle has at the level of municipalities (compared to the macroeconomic level) its peculiarities. These arise mainly from limited options of municipal politicians to use economic instruments to win electoral votes in elections. To receive electoral votes, municipal politicians use mainly public investments and projects that are at the level of municipalities so apparent that they may influence voters in their electoral decision-making. Prior to elections, expenditures on investments significantly increase for all municipal size groups. For municipal size groups of over 50,000 residents, however, they are (per capita) higher compared to smaller municipal size groups.This may be explained by the fact that these municipalities have higher disposable resources (higher per capita own budgetary revenues, higher potential to acquire resources to co-finance municipal projects and broader portfolio of debt financing). Expenditures on transfers do not significantly change prior to municipal elections. We interpret this finding in a way that politicians prefer such investment projects that are "visible". Transfers are used to pay for certain current expenses for which municipalities may (in accordance with the established rules) apply through grants.

Czech name

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Czech description

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Type

J_x - Unclassified - Peer-reviewed scientific article (Jimp, Jsc and Jost)

CEP classification

AH - Economics

OECD FORD branch

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Project

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Continuities

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year

2016

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Prague Economic Papers

ISSN

1210-0455

e-ISSN

—

Volume of the periodical

25

Issue of the periodical within the volume

3

Country of publishing house

CZ - CZECH REPUBLIC

Number of pages

17

Pages from-to

304-320

UT code for WoS article

000378669500004

EID of the result in the Scopus database

2-s2.0-84975256609