Politická ekonomie
Politická ekonomie
Prague Economic Papers
University of Economics, Prague

Prague Economic Papers Vol. 20 No. 1

Political Business Cycle in Czech Municipalities

DOI: https://doi.org/10.18267/j.pep.387

[full text (PDF)]

Lucie Sedmihradská, Rudolf Kubík, Jakub Haas

The paper examines the political business cycle at the municipal level in the Czech Republic using data for 205 municipalities in the period 2001-2007. We introduce empirical models based on fixed-effects panel data regression testing the capital and current expenditure manipulation prior to elections. The results indicate significant increase in capital expenditures and significant decrease in current expenditures prior to elections. At the same time the manipulation with capital expenditures does not increase the probability of re-election for the incumbents in the Czech municipalities.

Keywords: Czech municipalities, elections, local government, panel data regressions, political business cycle

JEL Classification: D72, D78, H72

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