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  • Political budget cycles: fiscal cycle effects in state expenditures in Poland
    47-62
    Agnes Halasz
    Views:
    125

    In this paper we aim to investigate what kind of role fiscal cycles played in the development of the state budget balances in Poland between 1989 and 2011. Overall, the results of the latest research have found that political budget cycles (PBC) are more typical in less developed countries with a shorter period of experience with democratic institutions, such as the post-socialist transition economies. Nevertheless, empirical studies point out that this phenomenon has been disappearing over time as voters learn how democratic institutions and political manipulation operate. However, this theory could not be proved by testing the pattern of Poland, neither in the case of budget balances nor for state expenditures. Despite the fact that some fiscal cycle effects were found in public sector wages and pensions in the election period of 1997 and 2001, these proved to be temporary, and simultaneously some other measures were identified that counterbalanced the effects of pork barrel spending. Overall, the cyclical evolution of the budget balances in Poland, particularly in the nineties, was not a result of political budget cycles.

    Journal of Economic Literature (JEL) classifications: D72, E62, H3

  • Interdependence between government redistribution and economic growth in the long run
    132-146
    Levente Nadasi
    Views:
    156

    The present paper aims to study changes in the degree of government redistribution with an institutional, historical, statistical and model-like approach. I investigate the impact of changes in redistribution on long-term economic growth in 30 European countries. It is generally stated that government spending/GDP ratio has been continuously increasing (in terms of trend) in Europe since the 1870s. I examine how the size of the states affects economic growth, and what other factors influence the long-run relationship between these two variables. My hypothesis is that in developed countries with high government
    redistribution it has been an impediment to economic growth in the long run. Finally, I illustrate this hypothesis with a statistical analysis of 30 European countries.

    Journal of Economic Literature (JEL) Classification: E66, H62, C10

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