Political Budget Cycles in Papua New Guinea

18 Pages Posted: 26 Sep 2007

Date Written: September 2007

Abstract

This paper assesses the presence of opportunistic electoral budget cycles in Papua New Guinea. Using quarterly time series data, a clear pattern emerges of pre-election manipulations of fiscal policy by incumbent governments, mainly in the form of increased development spending and overall primary expenditure, followed in some cases by retrenchment in post-election periods. These findings are consistent with the predictions of rational opportunistic political business cycle theory. It is noteworthy that revenue was not statistically significantly related to elections, either in the pre- or post-election period. In this regard, electoral swings in fiscal deficits reflect a preference for influencing expenditures rather than taxation.

Keywords: Working Paper, Government expenditures, Papua New Guinea, Budget deficits, Business cycles, Political economy

Suggested Citation

Faal, Ebrima, Political Budget Cycles in Papua New Guinea (September 2007). Available at SSRN: https://ssrn.com/abstract=1016249 or http://dx.doi.org/10.2139/ssrn.1016249

Ebrima Faal (Contact Author)

African Development Bank ( email )

Tunis
Tunisia
+216 7110 3775 (Phone)

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