Table 11 The election cycle and...

Table 11

The election cycle and government spending: GMM model

	(1)	(2)	(3)
L.Expenditure	0.757***	0.758***	0.787***
L.Expenditure	(0.0831)	(0.0799)	(0.0804)
Pre-election	1.672**
Pre-election	(0.521)
Election		1.105***
Election		(0.326)
Post-election			−1.331***
Post-election			(0.373)
Population growth (t – 1)	0.477**	0.598***	0.572**
Population growth (t – 1)	(0.192)	(0.232)	(0.240)
Median age (t – 1)	0.173**	0.185**	0.167**
Median age (t – 1)	(0.0735)	(0.0731)	(0.0675)
Unemployment rate (t – 1)	0.101**	0.109**	0.0967**
Unemployment rate (t – 1)	(0.0457)	(0.0477)	(0.0482)
Inflation (t – 1)	−0.144***	−0.163***	−0.175***
Inflation (t – 1)	(0.0341)	(0.0461)	(0.0533)
Government debt (t – 1)	0.00228	−0.00131	−0.000708
Government debt (t – 1)	(0.00601)	(0.00591)	(0.00581)
GDP growth (t – 1)	0.153**	0.136**	0.144**
GDP growth (t – 1)	(0.0649)	(0.0681)	(0.0675)
Tax revenue (t – 1)	0.518***	0.542***	0.522***
Tax revenue (t – 1)	(0.142)	(0.153)	(0.129)
Constant	3.659***	3.873***	3.029**
Constant	(1.337)	(1.510)	(1.441)
Observations	1,419	1,419	1,419
Time effects	Yes	Yes	Yes
Number of countries	91	91	91
Number of instruments	67	67	67
AR(2)	0.174	0.186	0.193
Hansen J	0.474	0.483	0.425

	(1)	(2)	(3)
L.Expenditure	0.757***	0.758***	0.787***
L.Expenditure	(0.0831)	(0.0799)	(0.0804)
Pre-election	1.672**
Pre-election	(0.521)
Election		1.105***
Election		(0.326)
Post-election			−1.331***
Post-election			(0.373)
Population growth (t – 1)	0.477**	0.598***	0.572**
Population growth (t – 1)	(0.192)	(0.232)	(0.240)
Median age (t – 1)	0.173**	0.185**	0.167**
Median age (t – 1)	(0.0735)	(0.0731)	(0.0675)
Unemployment rate (t – 1)	0.101**	0.109**	0.0967**
Unemployment rate (t – 1)	(0.0457)	(0.0477)	(0.0482)
Inflation (t – 1)	−0.144***	−0.163***	−0.175***
Inflation (t – 1)	(0.0341)	(0.0461)	(0.0533)
Government debt (t – 1)	0.00228	−0.00131	−0.000708
Government debt (t – 1)	(0.00601)	(0.00591)	(0.00581)
GDP growth (t – 1)	0.153**	0.136**	0.144**
GDP growth (t – 1)	(0.0649)	(0.0681)	(0.0675)
Tax revenue (t – 1)	0.518***	0.542***	0.522***
Tax revenue (t – 1)	(0.142)	(0.153)	(0.129)
Constant	3.659***	3.873***	3.029**
Constant	(1.337)	(1.510)	(1.441)
Observations	1,419	1,419	1,419
Time effects	Yes	Yes	Yes
Number of countries	91	91	91
Number of instruments	67	67	67
AR(2)	0.174	0.186	0.193
Hansen J	0.474	0.483	0.425

Note(s): Robust standard errors are in parentheses. The dependent variable is the ratio of total government expenditure to GDP (Expenditure). Time effects in our GMM setting is time trend, which is captured by a trend variable that begins in 1991 and increases by one in each of subsequent years for each country. We also use time trend instead of time-fixed effects to lower the number of instruments in our GMM estimations. ***, ** and * denote significance at the 1%, 5% and 10% level, respectively

Source(s): Authors' own work

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