Political Cycles in Public Expenditure: Butter vs Guns

Abstract

This paper explores, theoretically and empirically, how governments may use the tradeoff between social and military expenditure to advance their electoral and partisan objectives. Three key results emerge. First, governments tend to bias outlays towards social expenditure and away from military expenditure at election times. Second, the size of this tradeoff is larger when we exclude countries involved in conflict, where national security plays an important role on voter choice. Third, while certain categories of social expenditure are higher during left administrations, military expenditure is higher during right administrations