Abstract
ABSTRACT Political Business Cycle (PBC) models illustrate that government fiscal outcomes are driven by the private interests of incumbent policymakers who shape fiscal policy in pursuit of the popular vote. While the existing PBC studies tend to focus on influences on the overall budget size, this study posits that PBC also targets specific groups that can be distinguished by their size and associated tax bases. This research, using fiscal data of state governments in the US between 1979 and 2019, provides evidence that the conventional PBC patterns apply to the general public standing for the broad-based revenues, whereas the narrow-based revenues for the interest groups, businesses, and industries remain unaffected.
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