POLITICAL BUDGET CYCLES OR VOTERS AS FISCAL CONSERVATIVES? EVIDENCE FROM COLOMBIA

Theoretical models of the political budget cycle suggest that electoral manipulation of government expenditures can take the form of changes in the composition of spending, without impacting the overall budget or the deficit, and that the form and extent of this manipulation depend on the fiscal preferences of voters. In this paper, I use data on government expenditures and election outcomes in Colombia to provide an integrated analysis of voting behavior and the preelectoral dynamics of government spending. I emphasize potential changes in the composition, rather than the size, of the budget. I find that components of the budget that can be identified with targeted spending grow, and that non-targeted spending contracts, in the year preceding an election. Consistently, I find that voters reward the preelection increases in targeted spending, but punish incumbents who run high deficits before the election.Political Budget Cycle

Following the Money: How the 50 States Rate in Providing Online Access to Government Spending Data

Grades states' efforts to provide public spending data through Web portals; lists the benefits of "transparency 2.0," including cost-efficient and targeted spending; and outlines best practices for comprehensive, one-stop, one-click searchable sites

Electoral Manipulation via Expenditure Composition: Theory and Evidence

We present a model of the Political Budget Cycle in which voters and politicians have preferences for different types of government spending. Incumbents try to influence voters by changing the composition of government spending, rather than overall spending or revenues. Rational voters may support an incumbent who targets them with spending before the election even though such spending may be due to opportunistic manipulation, because it can also reflect sincere preference of the incumbent for types of spending voters favor. Classifying expenditures into those which are targeted to voters and those that are not, we provide evidence supporting our model in data on local public finances for all Colombian municipalities. Our findings indicate both a pre-electoral increase in targeted expenditures, combined with a contraction of other types of expenditure, and a voter response to targeting.

Governors' Budgets for FY 2013 - What Is Proposed for Medicaid?

Examines trends in governors' Medicaid budget proposals, including expected shortfalls, fiscal priorities, additional spending cuts, policy actions to control Medicaid costs, and targeted investments, as well as tax cuts and fiscal reform proposals

How Targeted Are Federal Expenditures on Children? A Kids' Share Analysis of Expenditures by Income in 2009

Analyzes the distribution of government spending on children by family income; category, such as health, social services, and education; and program, such as Medicaid; and the extent to which it is targeted to low-income children. Considers implications

Green in Your Wallet or a Green Planet: Views on Government Spending and Climate Change

The scientific community is a near consensus that climate change is not only anthropogenic but is also a major threat to people around the world. Despite the alarm bells from the scientific community many people in the United States simply deny the science of climate change. Many studies have targeted level of education, party membership, and gender in their role in influencing how individuals perceive climate change. This study showed that views on government spending plays a very important role in the importance of the environment. Individuals who supported decreased government spending tend to view jobs as more important than the environment when compared to individuals who supported increased government spending, this is true among both Republicans and non-Republicans. Generally speaking, the Republican platform typically involves the economy over the environment, and the Democratic platform typically involves more environmentally friendly action. This study posits Republicans that believed the government should increase spending in 2012 were indistinguishable from non-Republicans who supported reductions in government spending. The inability to distinguish between republicans who believe in increased spending and non-republicans who believe in increased spending suggests that views on the environment may be more than simply a partisan issue they may simply have to do with willingness to spend money on the environment

Are the poor protected from budget cuts? theory and evidence for Argentina

Adjustment programs often emphasize protecting social spending - especially pro-poor spending - from cuts. Yet the incidence of fiscal contraction - and hence the case for action to protect public spending on the poor at a time of overall fiscal austerity - is an empirical question, which the author addresses using data from Argentina. Aggregate budget cuts in Argentina in the 1980s and1990s, typically brought proportionately greater cuts in social spending."Non-social"spending was protected. But proportionate cuts for types of social spending that matter more to the poor, were about the same as the cuts for those that tend to favor the non-poor. Absolute cuts were in fact greater for"social insurance"that matters more to the non-poor. But spending on targeted social assistance, and employment programs, was more vulnerable to aggregate spending cuts, than were more universal social services. Social spending was clearly exposed to fiscal contraction, but this was somewhat less true of pro-poor spending on things that also benefited the non-poor. So fine targeting may be a mixed blessing for the poor, bringing greater vulnerability to cuts, possibly when help is most needed. There is a strong case for action to protect pro-poor social spending at such times. An externally financed work-fare scheme in Argentina was far better targeted than other social spending, but still had to ensure that a small, but relatively well-protected share of the benefits went to the non-poor. The program was clearly subject to the same political economy constraints that influenced the incidence of past fiscal contractions in Argentina. The program expanded into poor areas when the budget increased, but retreated from poor areas when the program was cut. It was the program's disbursements to non-poor areas that were protected. Still, given the low wage rate offered, the direct benefits from the program were still likely to have favored the poor, even after the cuts.Public&Municipal Finance,Public Sector Economics&Finance,Urban Economics,Poverty Reduction Strategies,Services&Transfers to Poor,Rural Poverty Reduction,Public Sector Economics&Finance,Urban Economics,Safety Nets and Transfers,Services&Transfers to Poor

Pork Barrel Cycles

We present a model of political budget cycles in which incumbents influence voters by targeting government spending to specific groups of voters at the expense of other voters or other expenditures. Each voter faces a signal extraction problem: being targeted with expenditure before the election may reflect opportunistic manipulation, but may also reflect a sincere preference of the incumbent for the types of spending that voter prefers. We show the existence of a political equilibrium in which rational voters support an incumbent who targets them with spending before the election even though they know it may be electorally motivated. In equilibrium voters in the more "swing" regions are targeted at the expense of types of spending not favored by these voters. This will be true even if they know they live in swing regions. However, the responsiveness of these voters to electoral manipulation depends on whether they face some degree of uncertainty about the electoral importance of the group they are in. Use of targeted spending also implies voters can be influenced without election-year deficits, consistent with recent findings for established democracies.

Spending Out - Making It Happen

While it may be of interest to a wider audience, this companion guide is focused on the practicalities of spending out and targeted at those foundations that have decided this is the path for them. By sharing the practical experience of those who are well into the process or have already completed it, we hope to make it easier for others wishing to follow in their footsteps

Social Spending Generosity and Income Inequality: A Dynamic Panel Approach

This paper explores whether more generous social spending polices in fact lead to less income inequality, or if redistributive outcomes are offset by behavioral disincentive effects. To account for the inherent endogeneity of social policies with regard to inequality levels, I apply the System GMM estimator and use the presumably random incidence of certain diseases as instruments for social spending levels. The regression results suggest that more social spending effectively reduces inequality levels. The result is robust with respect to the instrument count and different data restrictions. Looking at the structure of benefits, particularly unemployment benefits and public pensions are responsible for the inequality reducing impact. More targeted benefits, however, do not significantly reduce income inequality. Rather, their positive effect on pre-government income inequality hints at substantial disinctive effects.Social Benefits, Redistribution, Income Inequality, System GMM