Political Budget Cycle: A Sub-National Evidence from Pakistan

On the political economy of resource rents distribution

“…Notably, there is an 18.8 percent increase in per capita health expenditure and a 5.3 percent rise in per capita education expenditure during the pre-election year, extending the findings of Nguyen and Tran (2023) regarding welfare spending. Moreover, the results are in line with those of Nazir et al (2022) regarding the extension of electoral cycles beyond election years in health care spending, while further demonstrating the applicability of this pattern to education investment. Additionally, subnational governments with high resource revenue often end up investing more in health and education in anticipation of an election, aligning with country-level results presented by Klomp and de Haan (2016).…”

“…This result is consistent with the findings of Nazir et al (2022) regarding the extension of electoral cycles beyond the election year at the subnational level. However, unlike Nazir et al (2022), we also find that this applies to education spending, as well as health care, as he suggests.…”

“…This could be due to a lagged effect for future election campaigns, a finding commonly observed in less-developed countries, probably due to corruption, bureaucracy, inefficiency, and lower state capacity (Akhmedov & Zhuravskaya 2004;Ebeke & Ölcer 2013;Gonzalez 2002). This result is consistent with the findings of Nazir et al (2022) regarding the extension of electoral cycles beyond the election year at the subnational level. However, unlike Nazir et al (2022), we also find that this applies to education spending, as well as health care, as he suggests.…”