This paper considers the presence of political budget cycles in Greece's municipalities. We construct a new dataset from primary sources and we find strong evidence of pre-electoral manipulation through increased expenditures and excessive borrowing. We use a dynamic panel data approach producing evidence of opportunistic behavior in local government finances. Our results are robust in the face of a series of controls including mayors running for reelection, their political alignment with the central government, and prolonged terms. Moreover, the results are robust to the exclusion of small sized municipalities and to the restriction of the time range of our investigation to the post-Maastricht period. We also consider whether opportunistic policies influence incumbents' reelection prospects finding that increased expenditures and election year opportunistic excesses are electorally rewarding. Our findings provide a characterization of opportunistic public finances management in Greek municipalities where electorally motivated budgetary decisions appear impervious to the various municipal reform attempts.
This study provides a quantitative review of the empirical literature on partisan politics. Given the voluminous work on this subject, we focus on the relationship between government ideology and public spending. By exploiting a dataset of 800 estimates from papers published between 1992 and 2018, we find no evidence of publication bias. Taking into account the differences in the various categories of spending, proxies of ideologies, estimations methods, as well as, data and publication characteristics, we find evidence of a small positive and significant effect. JEL Classification numbers: D72, H00, C52. *We thank the editor Prof. Anindya Banerjee and two anonymous referees for their constructive comments and helpful suggestions. In addition, we thank the participants of the 2019 MAER-Net Colloquium for their comments and suggestions. Any remaining errors are the responsibility of the authors.
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