Term limits and political budget cycles at the local level: evidence from a young democracy

Autor(es)

Klein, Fabio Alvim ^[1] ; Sakurai, Sergio Naruhiko ^[2]

Afiliação do(s) autor(es)

^[1] Univ Sao Paulo, Off Publ Management, Govt & Sch Arts Sci & Humanities, BR-05508 Sao Paulo - Brazil

^[2] Univ Sao Paulo, Dept Econ, Sch Econ Business Adm & Accounting Ribeirao Preto, BR-05508 Sao Paulo - Brazil

• Tipo de documento: Artigo Científico
• Fonte: EUROPEAN JOURNAL OF POLITICAL ECONOMY; v. 37, p. 21-36, MAR 2015.
• Citações Web of Science: 20

Resumo

The existing empirical literature on political budget cycles (PBCs) has generally ignored the effects of term limitations on fiscal opportunism. In this paper, we explore the different electoral incentives faced by first term mayors who are eligible for reelection and second term mayors who are legally banned to stand for another term in office. Our results point to significant fiscal differences between both types of mayors in Brazil. During elections, first term mayors decrease revenues from own local taxation and change their budget composition by moving from current expenditures towards capital related ones, while budget balances and total expenditures remain unchanged. These findings are consistent with recently developed signalling models of PBC and with the conditional political budget cycles literature, where incumbents aiming at maximizing their reelection chances subject to institutional restrictions on fiscal deficits change the composition of the budget in electoral years by providing more visible and targeted expenditures. (C) 2014 Elsevier B.V. All rights reserved. (AU)

• Processo FAPESP: 08/11336-1 - Elementos políticos e comportamento fiscal dos municípios brasileiros
• Beneficiário: Sergio Naruhiko Sakurai
• Modalidade de apoio: Auxílio à Pesquisa - Regular