Chang, Eric. “Electoral Incentives and Budgetary Spending: Rethinking the Role of Political Institutions.” Accepted at Journal of Politics (pending on minor revisions).

Abstract

This paper reconciles the long-standing debate on electorally motivated government spending by embedding politicians' electoral incentives in political institutions. Using budgetary spending data from 21 OECD countries from 1973 to 2000, this paper shows that electoral budgetary cycles take the form of higher district-specific spending under single-member district systems and higher social welfare spending under proportional representation systems. This study also shows that budgetary cycles are constrained by multiple veto players. The results remain robust even after taking into account the effect of exchange rate regimes and the possibility of strategically timed elections.