[Seminaire CREM] Présentation de Frank Bohn, Radboud University

Abstract:

It is commonly believed that governments use budget deficits to manipulate voters in election years. However, this result is largely driven by findings for developing countries. Fiscal rules may prevent budget deficits in OECD countries. We argue both theoretically and empirically that governments may switch to manipulating by shifting to more visible spending components. Corruption and political instability are contributing factors.