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Home Issues Backissues Volume 31, No.1 The Political-Economic Analysis on the Budgetary Decision-Making in Local Government: The View of Political Budget Cycle

The Political-Economic Analysis on the Budgetary Decision-Making in Local Government: The View of Political Budget Cycle

Yan-Kai Fu
2006 / 05
Volume 13, No.1

pp.119-162
10.6612/tjes.2006.13.01.119-162

Abstract

This research attempts to apply political business cycle theory to observe the intention of local incumbents. Besides, through empirical research approach, the researcher hopes to gain some results, which would help to obtain better understanding of certain manipulation of politics during the year of local elections. During the research years between 1988 and 2001, the local government uses the total government budgeting dates resources from every county and city in Taiwan province, doing pooling regression analysis to observe whether during the year of county magistrates and city mayors election people manipulation fiscal policy tools to gain the ballot. The result of this paper is that, county magistrates and city mayors election have not a significant impact on the local fiscal policy tools. Nonetheless, we consider the interaction effects with the year of local elections and the first term incumbents, which have a significant impact on the local fiscal policy tools. To sum up, evidence in support of the local political budget cycle hypothesis.

Keywords

local government

budgetary decision-making

political business cycle

political budget cycle

county magistrates and city mayors election

pooling regression