Abstract
In this paper, on the basis of relevant statistical tests, the influence of the electoral process on the trajectory of fiscal indicators in the transition countries is analyzed. The aim of the research is to identify the political manipulation of certain fiscal policy mechanisms in transition countries.The focus of the survey is on the growth of general government spending, the reduction of general government revenues and the creation of budget deficits as the coherent consequences of fiscal expansion in the pre-election period. By testing, there is no relevant evidence of the use of tax incentives as a form of political action on the economic sphere. On the other hand, the results of the survey indicate that in the observed countries, there really is a rise in government spending in the period before the election process and, consequently, the growth of budget deficits. However, according to the same findings, in the post-election period there is no reduction in consumption. Growth in general governments consumption continues, but to a lesser degree, which in turn leads to the correction of the budgetary balance.
Highlights
In this paper, on the basis of relevant statistical tests, the influence of the electoral process on the trajectory of fiscal indicators in the transition countries is analyzed
The results show that a good part of the functioning of the EMU is reflected in the process of convergence of national budget deficits and the reduction of discretionary fiscal policy management (Fatás & Mihov, 2003), and that direct election manipulation of fiscal policy more often occurs in conditions of favorable macroeconomic environment (Golinelli & Momigliano, 2006)
The analysis conducted on the sample of 28 countries in the period 1995-2017 covers a total of 146 electoral processes
Summary
The use of fiscal policy for political purposes is most often proven by identifying the growth of public spending, reducing tax burdens, or changes in the structure of budgetary expenditures during the preelection period. A high concentration of political power is a context in which there is no effective system of restrictions and penalties for the use of current economic mechanisms for political purposes In support of such a statement, Boyar (2015) offers evidence suggesting that in the system of the rule of one or more groups of political parties, there is a ramification of the abuse of fiscal policy. In accordance with the subject and defined goals of the research, the following research hypotheses are tested: H1: Increase in total public spending is the result of pre-election manipulation of fiscal policy in observed transitional economies. In relation to the basic hypotheses and assumptions about oscillations of fiscal indicators that are conditioned by the election cycles, conducted research hypotheses are tested: H(1.1): In the post-election period, there is a fiscal contraction, or a decrease in total public spending in the observed transition economies. After the election cycle, public expenditures are declining, revenues are rising, so there is a surplus in the budget
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