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This paper finds new evidence of using public housing upgrading programs for political rent-seeking motives. We merged datasets comprising public housing upgrading programs, resale public housing transactions, electoral division boundaries, and general election events in Singapore from 2010 to 2016. We find evidence of significant increases in public housing upgrading programs in the ruling party constituencies one quarter before general elections. Due to resource constraints, the probability of blocks being selected for future upgrading programs diminishes with the upgrading announcements in neighboring housing blocks. The negative externality is felt more by residents of affected housing blocks in the opposition constituencies, causing price declines of 1.9 % more than housing blocks in the ruling party constituencies. The preferential treatment in the upgrading program selection process for the ruling party constituencies over the opposition constituencies widens the housing price gap between the two constituencies. [ABSTRACT FROM AUTHOR]

Why do public works programs in developing democracies often experience implementation failures at the local level? Building on the literature on political business cycles, our study sheds light on a key explanation. We argue that electoral cycles undermine the completion of public works projects because of incumbents' difficulties in reaping electoral rewards for following through on projects proposed just prior to an election. Analyses based on project-level data from a nation-wide public program in India supports the argument. We find that projects proposed close to an upcoming election are less likely to be eventually completed than projects proposed at other times. We further find that incumbent turnover exacerbates the effect of electoral cycles and that this modifying effect is plausibly causal. The results suggest that new incumbents have reduced incentives to follow through on projects proposed by their predecessors due to the difficulties involved with claiming credit for such projects. [ABSTRACT FROM AUTHOR]

We document a political cycle in the investment decisions of state-owned enterprises (SOEs) by using the constitutionally mandated election schedule in India as a source of exogenous variation in politicians' incentive to cater to voters. Using a project-level investment database, we find that SOEs announce more capital expenditure projects in election years, especially in infrastructure, and in districts with close elections, high-ranking politicians, and left-wing incumbents. SOE projects in election years have negative announcement returns, suggesting a loss in shareholder value. These patterns are not seen in nongovernment firms or in off-election years. (JEL G31, G38, D72, D73, P16) Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]

Using a large panel of more than 140,000 state-owned enterprises (SOEs), this study examines SOEs' investment behavior surrounding 82 national elections in 25 European countries between 2001 and 2015. We find that SOEs increase their corporate investment by about 29% of the sample average during national election years. This effect is more pronounced in fixed timing and closely contested elections. The effect is also stronger in countries with low institutional quality, more centralized political systems, and state-controlled banking systems. In contrast, we find the matched non-SOEs significantly decrease their corporate investment during national election years. (JEL G18, G30, G32, E22) Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]

In order to analyze the new European political cycle; we must take into account several events: the Conference on the future of Europe; the limits of the COFOE; the proposal of the European Parliament to reform the treaties; the jug of cold water from the Council in June 2022; and the incidence of Russia's war of aggression on the future of Europe. All this will be relevant in the V Spanish Presidency, particularly in view of the reform of the treaties. [ABSTRACT FROM AUTHOR]

Can International Monetary Fund (IMF) lending improve natural resource governance in borrowing countries? While most IMF agreements mandate policy reforms in exchange for financial support, compliance with these reforms is mixed at best. The natural resource sector should be no exception. After all, resource windfalls enable short‐term increases in discretionary spending, and office‐seeking politicians are often unwilling to forgo this discretion by reforming the oil, gas, or mining sector. I investigate how and when borrowers go against their political interests and establish natural resource funds—a tool often promoted by the IMF—in the wake of a loan agreement. Using text analysis, statistical models, and qualitative evidence from natural resource policy and IMF conditionality for 74 countries between 1980 and 2019, I show that borrowers under an IMF agreement are more likely to create or regulate a resource fund, particularly if the agreement includes binding conditions that highlight the salience of natural resource reforms. This study contributes to extant research by proposing a new method to extract information from IMF conditions, by introducing a novel dataset on country‐level natural resource policy, and by identifying under what circumstances international reform efforts can help combat the resource curse. [ABSTRACT FROM AUTHOR]

Economic reforms since the 1980s resulted in weaker wage growth and the retrenchment of the welfare state. Labor's declining share of income in conjunction with consistent asset price inflation, created an environment where the electorate increased its demand for credit to which politicians, driven by opportunistic re-election motives, respond positively. The empirical findings suggest that politicians, irrespective of their ideology, introduce policies and manipulate credit growth to maximize their re-election prospects. Moreover, the results indicate that partisan politics in Australia have become less pronounced, suggesting an ideological convergence of the two major political parties with respect to credit. [ABSTRACT FROM AUTHOR]

The main purpose of this article is to investigate the effect of central bank independence on the establishment of Political Business Cycles (PBC) in Iran. For this purpose, the modified model of Shi and Svensson (2006) in the framework of the Smooth Transition Autoregressive Regression (STAR) during the period of 1978-2018 has been used. The results, in addition to confirming the linear relationship between the variables, showed that in the election period, for the values ​​of PBC (ratio of budget deficit to GDP) above the threshold, central bank independence, a positive and significant effect, and for values ​​below threshold has had a significant negative effect on PBC. Another finding of this paper is that the sum of the coefficients of central bank independence in the two regimes indicates the negative effect of increasing central bank independence on PBC. Therefore, it is suggested that, in addition to restricting the use of oil revenues, increasing the central bank's independence in the true sense of the word should be considered in order to gradually reduce PBC.

Abstract Herein, we present a novel topic variation detection method that combines a topic extraction method and a change-point detection method. It extracts topics from time-series text data as the feature of each time and detects change points from the changing patterns of the extracted topics. We applied this method to analyze the valuable, albeit underutilized, text dataset containing the Japanese Prime Minister’s (PM’s) detailed daily activities for over 32 years. The proposed method and data provide novel insights into the empirical analyses of political business cycles, which is a classical issue in economics and political science. For instance, as our approach enables us to directly observe and analyze the PM’s actions, it can overcome the empirical challenges encountered by previous research owing to the unobservability of the PM’s behavior. Our empirical observations are primarily consistent with recent theoretical developments regarding this topic. Despite limitations, by employing a completely novel method and dataset, our approach enhances our understanding and provides new insights into this classic issue.

In this paper, we show how results in state administered university entrance standardized exams in Portugal are sensitive to the electoral cycle. Using individual data for all senior high school students taking national exams between the years 2004 and 2018, we reveal that whenever exams occur in years of upcoming legislative elections, the average senior high-school student grade increases by 1.17 and 0.63—on a 0 to 20 scale, in the core disciplines of Mathematics and Portuguese, respectively. Furthermore, the probability of passing the exams, that is, of getting more than 9.5 out of 20, increases by ten and eight percentage points in those same exams. Neither the quality of students nor the leniency of grading in these years explain this rise in pre-election exam grades. Robustness tests using early legislative elections, held, exceptionally, before national exams, and therefore not anticipated by those who arguably manipulate the exams, show that there was no inflation of exam scores in those years. Furthermore, we highlight that exam inflation can be a powerful electoral tool, with a unit increase in the municipality average score in Mathematics and Portuguese exams associated with a 1.46 percentage point rise in the vote share of the sitting government. [ABSTRACT FROM AUTHOR]

The consequences of variations in economic growth for vote volatility are analyzed on a panel of 14 Indian states between 1957 and 2013. Two measures of volatility are used: changes in party vote shares at the assembly level and changes in the state average of vote volatilities constructed at the constituency level. While the results find that both vary inversely with income growth rates, volatility at the constituency level is found to be more sensitive to growth rates. Examination of the periodicity of income growth's impact finds that growth in the final year of governance has a stronger effect on volatility than does the average growth rate arising over the incumbent's tenure. We confirm for Indian states that vote volatility responds more to negative changes than positive changes in the growth rate and, by decomposing volatility we find, contrary to most studies, that growth rates affect internal vote shifting more than shifting between exiting parties and newcomers. The responsiveness of volatility to economic and political characteristics of the state reinforces the hypothesis that theories of economic voting have an important role to play in understanding electoral volatility and may provide a more insightful way of approaching the political business cycle. [ABSTRACT FROM AUTHOR]

A rich literature has noted political business cycles in democracies. We argue that in an autocracy with strong bureaucratic institutions, the pressure of evaluation and promotion has also generated political cycles of tax‐break policies. Furthermore, the timing and content of the evaluation have driven leaders to use tax breaks strategically to build economic performance, producing distributional consequences. Combining panel data of 1,510,153 firm‐year observations, city‐leader data from 1995 to 2007, and field interviews, we find that the tax‐break rates dropped for most firms during mayors' turnover years. In the first year of office, that is, the "busy year," mayors needed to prioritize large firms and especially large foreign firms. Small domestic private firms bore the cost of tenure cycles. In the last year of the mayors' tenure, that is, the "dust‐settled" year, there was little incentive to seek promotion, and even important firms could not gain the mayors' attention. [ABSTRACT FROM AUTHOR]

This article analyses political business cycles (PBCs) in ten former European communist countries. The dataset used covers the period 1990‐2018. The results show that the PBCs manifest themselves in these countries through both fiscal and monetary policy. Changes in government expenditure during election times are found to be significant in reducing unemployment. Hence, it signals that there is a politically driven fiscal expansion. The results also show the importance of institutional quality in reducing the effects of the PBCs. The monetary policy models indicate that changes in money stock during and around election times affect the unemployment rate. Undertaking a subsample analysis of the non‐EU and EU members highlights the case that the membership of the EU is an important factor in preventing the development of PBCs. Related Articles: Hazakis, Konstantinos J. 2015. "The Political Economy of Economic Adjustment Programs in the Eurozone: A Detailed Policy Analysis." Politics & Policy 43 (6): 822‐854. https://doi.org/10.1111/polp.12141 Rogers, Chris. 2009. "The Politics of Economic Policy Making in Britain: A Re‐Assessment of the 1976 IMF Crisis." Politics & Policy 37 (5): 971‐994. https://doi.org/10.1111/j.1747‐1346.2009.00207.x Sager, Fritz, and Markus Hinterleitner. 2016. "How do Credit Rating Agencies Rate? An Implementation Perspective on the Assessment of Austerity Programs during the European Debt Crisis." Politics & Policy 44 (4): 783‐815. https://doi.org/10.1111/polp.12165 [ABSTRACT FROM AUTHOR]

Copyright of International Journal of Social Sciences (IJSS) / Uluslararasi Sosyal Bilimler Dergisi is the property of International Journal of Social Science and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Herein, we present a novel topic variation detection method that combines a topic extraction method and a change-point detection method. It extracts topics from time-series text data as the feature of each time and detects change points from the changing patterns of the extracted topics. We applied this method to analyze the valuable, albeit underutilized, text dataset containing the Japanese Prime Minister's (PM's) detailed daily activities for over 32 years. The proposed method and data provide novel insights into the empirical analyses of political business cycles, which is a classical issue in economics and political science. For instance, as our approach enables us to directly observe and analyze the PM's actions, it can overcome the empirical challenges encountered by previous research owing to the unobservability of the PM's behavior. Our empirical observations are primarily consistent with recent theoretical developments regarding this topic. Despite limitations, by employing a completely novel method and dataset, our approach enhances our understanding and provides new insights into this classic issue. [ABSTRACT FROM AUTHOR]

This paper tests the existence of political credit cycles, the positive comovement between credit and elections. While several single‐country studies point to the existence of this relationship, the link between electoral cycles and credit expansion has seen little exploration at the multicountry level. Using a comprehensive dataset covering bank and non‐bank credit in 165 countries from 1960 to 2013, we show that both government and private credit significantly increase in election years. This finding suggests the possibility that politicians use not only fiscal and monetary policy to court voters, but also implement credit policies such as interest rate subsidies and tax breaks for debt to enhance credit growth. We also find that a higher degree of financial openness weakens the frequency and magnitude of political credit cycles; yet, the conditional effect of financial openness is stronger for developing countries than developed economies. [ABSTRACT FROM AUTHOR]

This paper investigates the occurrence of Political Business Cycles (PBC) in the Brazilian municipal elections between 2000 and 2012, taking as reference the classical theories of CPE and their derivations. It empirically analyzes the influence of public expenditures, income level and geographic region on re-election of mayors and party successions, to determine which theoretical model best applies to the case of Brazilian cities, whether Opportunist or Partisan. The econometric strategy comprises the application of two Probit models, a panel with random effects and a binary structured as a panel (pooled). It concludes that there is evidence that Opportunistic Political Cycles occur in the Brazilian municipalities during the analyzed period.

Building on studies on the political business cycle, the literature on welfare state retrenchment has argued that governments which cut the welfare state try to avoid blame by implementing painful measures in the beginning of the mandate and expanding benefits as elections approach. In contrast to this linear relationship, this article argues that governments often feel pressured to fulfil (mostly expansionary) campaign promises during the first months in office. Consequently, cutting right away is not what should be expected. Instead, a more nuanced, U-shaped timing trajectory is probable with a period in the beginning characterised by both cuts and fulfilment of expansionary pledges, followed by a period of cutbacks, and finally an expansive phase towards the end of a mandate. This argument is tested on our new original dataset of legislative changes in five European countries – Britain, Denmark, Finland, France and Germany – during the last four decades. [ABSTRACT FROM AUTHOR]

This study evidences the existence of partisan and electoral cycles in privatisation, by using a sample composed of 22 European countries during the period 1995–2013. Our findings suggest that privatisation reforms tend to be implemented by governments with different ideologies when elections are not immediate; however, results support a greater orientation of right-wing governments towards privatisation reforms in election periods. After the elections, right-wing governments continue adopting privatisation reforms, but governments from ideological traditions tend to oppose such reforms. [ABSTRACT FROM AUTHOR]

Executive control of government is generally not a long-term job. In such cases, relatively short executive tenure should be expected to play an important role in determining the degree to which policymakers internalize the future costs associated with their current fiscal behavior. The effects of policymaker's expected planning horizons on macroeconomic outcomes, however, have been difficult to model outside of a fixed term limit context due to the unobserved likelihood of remaining in office, along with potential endogeneity problems where re-election campaigns can be enhanced with generous, deficit-financed expenditures in election years. From a globally representative sample of 79 countries over a 32-year period (1980–2012), this paper provides empirical evidence suggesting that incumbent governments who know that will not be in office in the following period with a probability of one, are found to generate significantly higher deficits in a linear discounting model, and are found to produce the least responsible fiscal outcomes where the likelihood of re-election is around fifty percent in quadratic discounting models. [ABSTRACT FROM AUTHOR]

Spatial inequalities in publicly provided goods such as healthcare facilities have substantial socioeconomic effects. Little is known, however, about why publicly provided goods diverge among urban and rural regions. This study exploits narrow parliamentary majorities in German states between 1950 and 2014 in a regression discontinuity (RD) framework to show that government ideology influences the urban–rural gap in public infrastructure. Left-wing governments relocate hospital beds from rural regions. It is proposed that left-wing governments do so to gratify their more urban constituencies. In turn, spatial inequalities in hospital infrastructure increase, which seems to influence general and infant mortality. [ABSTRACT FROM AUTHOR]

This paper analyses financial inclusion in Africa focusing on the role of political business cycles and pricing behaviour of banks. We employ a sample of 330 banks operating in 29 African countries to test for two related hypotheses. Panel fixed and random effects were estimated for the period 2002 to 2013. The regression results that ensued suggests first that loan price increases in pre-election and election years. Building on this result and employing various specifications of financial inclusion, the second results suggest that, high bank loan prices in election years tend to increase financial access more, compared to non-election years, and that, high deposit price reduces financial usage but increases financial access in election years, compared to non-election years. By extension, these results have important policy implications for policymakers.

This paper analyses financial inclusion in Africa focusing on the role of political business cycles and pricing behaviour of banks. We employ a sample of 330 banks operating in 29 African countries to test for two related hypotheses. Panel fixed and random effects were estimated for the period 2002 to 2013. The regression results that ensued suggests first that loan price increases in pre-election and election years. Building on this result and employing various specifications of financial inclusion, the second results suggest that, high bank loan prices in election years tend to increase financial access more, compared to non-election years, and that, high deposit price reduces financial usage but increases financial access in election years, compared to non-election years. By extension, these results have important policy implications for policymakers. [ABSTRACT FROM AUTHOR]

We provide a microfoundation for the existence of political business cycles generalizing and extending the classic Nordhaus model. Using a differential games approach, we model the strategic interaction of legislators in an election period and show that cycles can exist in equilibrium. The existence and shape of cycles depend on the parameters of the model and the initial level of unemployment. In addition, we offer an extension of the model to incorporate presidential veto behavior. • We provide a microfoundation for the existence of political business cycles. • We model strategic interaction of legislators in a differential game. • The existence and shape of cycles depend on the parameters of the model. • Our model rationalizes presidential veto behavior. [ABSTRACT FROM AUTHOR]

Political business cycles are typically linked to the manipulation of fiscal or monetary policy instruments. In a recent article, Imami, Lami and Uberti (ILU) argue that opportunistic politicians may also choose to manipulate non-fiscal/non-monetary policy instruments. Here, we extend ILU's study using time-series data on mining-sector licensing from post-conflict Kosovo (2001–2018). We find robust evidence that is consistent with electoral opportunism in the allocation of mining permits, despite the checks-and-balance mechanisms introduced by Kosovo's international administrators in an attempt to reduce the politicisation of licensing. That said, the cycle effect is only observed prior to scheduled, as opposed to early, elections. Disaggregating the data by licence type, in addition, we find that the observed election cycle is driven primarily by the manipulation of licences for the mining of construction materials. We argue that, in the context of post-conflict Kosovo, this is the category of licences whose strategic manipulation offers the greatest pay-off to the incumbent. The results raise some questions about the feasibility of fighting political opportunism (and, relatedly, corruption) by establishing formal check-and-balance mechanisms. [ABSTRACT FROM AUTHOR]

In the literature, it has been suggested that political budget cycles are context-conditional, i.e., do not occur in all countries or under all circumstances. What about the underlying economic conditions? It has already has been shown that recessionary expectations reinforce the political budget cycle. This paper argues theoretically that opportunistic policymakers expecting a recession during an election year allow the primary deficit to increase even more when the stock of debt is very high, but reduce the deficit by more during an expected boom (in an election year). For the empirical estimation we use panel data from Portuguese municipalities. Plots of average marginal effects for election years show that differences between high- and low-debt municipalities become more pronounced in stronger expected recessions as well as booms; the stronger effect on the deficit in high-debt municipalities is caused by changes on both the revenue and the expenditure side. A whole armada of robustness tests (non-linear effects, alternative specifications of excessive debt and forecasts, various methods to account for time effects and clustering, several sample restrictions) confirms our results. [ABSTRACT FROM AUTHOR]

This paper discusses the gap between the expected and real effects of Colombian trade liberalization policy. First, we stress the influence of international integration on Colombia's growth and development, and explains why moving toward more free trade has not contributed to the consolidation of high value-added industries in that country. Ultimately, we apply the theory of political cycles and suggest that political power in Colombia has contributed to get the country trapped into an international dependency on primary commodities. [ABSTRACT FROM AUTHOR]

We examine the relation between foreign direct investment (FDI), elections and welfare in Africa using data from 1990 to 2014. Our results show evidence that elections play a positive role in altering the relationship between FDI and welfare as they are considered by investors as risk reduction events. Interestingly, when we split the sample based on the quality of institutions, we find that the interaction between FDI and elections is mostly insignificant in countries with strong institutions. However, the interaction between FDI and elections is positive and significant in countries with weak institutions. © 2019 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

In this paper we argue that the political budget cycle test for opportunistic spending is weakened by the absence of a strong reason for why spending increases should be restricted to the time period leading into the next election. One would expect that a targeted benefit should elicit the same degree of voter support whenever it is received. Here we argue that while the political need to fulfill a list of pre-election promises serves to constrain excessive spending, the characteristic that some expenditure items better demonstrate the contributions of the current government to voters (with depreciating memories) leads to a predictable reallocation of the composition of budgetary spending across the life of a government. Our test for a predictable timing pattern to subcomponents of the budget uses capital expenditures as the budgetary item with greater visibility spillovers and a data set of 14 Indian states over 54 years (1959/60–2012/13). The predictions that capital expenditures relative to both total government expenditure and government consumption should rise across the governing interval are found to be consistent with the data and provide a better fit with the data than more traditional political budget cycle models that use aggregate spending/deficits in the pre-election period. [ABSTRACT FROM AUTHOR]

There exists a vast literature inquiring and modelling the nexus between politics and macroeconomic policy making. Most of the empirical studies based on data of OECD countries have found that electoral and partisan motives have a greater short term impact on inflation than on real variables like output growth or rate of unemployment. Recent studies based panel data on OECD countries have reinforced these findings. The present study is an empirical attempt to explore the nature of this nexus in case of independent India using 62 years of monthly data on inflation supplemented with data on election and ideological stand of political parties in power. The empirical exercise is based two statistical procedures. These are regression based procedures and Anova based procedures. As regards Anova based exercises, the GLM procedure is to take into account the unbalanced nature of the implied factorial design of the exercise. [ABSTRACT FROM AUTHOR]

Abstract Chinese local leaders' behaviors are driven by a career incentive structure in which those delivering better performances are more likely to be promoted. Local leaders signal competence when their superiors actively collect evidence to evaluate their performances: these are years leading to the end of a five-year term. To create better economic performances, local leaders lessen the enforcement of environmental regulations to reduce local industries' production costs and/or to attract firms from other jurisdictions. Such selective enforcement creates an environmental political business cycle in which pollution increases in years leading to the year of leader turnover. The empirical analysis on a panel of Chinese prefectures of 2002–2010 reveals a U-shaped relationship between a prefecture's party secretary's years in office and its average annual PM2.5 level. [ABSTRACT FROM AUTHOR]

This study investigates whether there is a political business cycle (PBC) on the agricultural supports in the Turkish economy. In this respect, we investigate the policies of different Turkish governments for the agricultural supports measured by the producer support estimates for the period 1986-2011. To this end, first the series for the producer support estimates are filtered by the Hodrick-Prescott filter, and then an econometric model is employed to estimate the effects of a set of explanatory variables including the economic crisis, the opportunistic and the partisan characteristics of the incumbent parties. Our results provide limited support for the opportunistic type PBC. Moreover, it seems that some Turkish governments have created the partisanship type PBCs

The article presents strategies of fiscal consolidations conducted in Poland in cities with powiat rights, and a study of causes behind the decision to conduct such fiscal consolidations. Local governments showing an improvement of their public finances have been distinguished; and based on that, a description of various methods of reduction of expenditures, deficit or debt in Polish local governments has been presented. An analysis of data shows the dominance of consolidations on the revenue side. The study has identified few cases of expenditure cuts, and they mostly included investments, public transport and housing expenditures. Besides the description of data concerning fiscal consolidations, the article also presents a multivariate probit regression model and logistic regression model estimated based on panel data aimed at studying the determinants of conducting financial consolidations in a given local government. The hypotheses that macroeconomic variables and the election cycle have a statistically significant effect on the decision to conduct consolidation have been positively verified; whereas the hypothesis that other political factors significantly affect the probability of improvement of the financial situation of a local government have been verified negatively. [ABSTRACT FROM AUTHOR]

This paper analyzes an augmented political business cycle model taking into account the effect of employment creation decisions by the ruling party jointly on inflation and growth. The objective is to maximize voter support in the next election that depends on the rate of unemployment as well as that of growth and inflation. We allow for stochasticity in the New Keynesian Phillips Curve model for the relationship between inflation and unemployment as well as in a benchmark labour productivity function for analyzing the growth rate. We provide explicit solution paths of the affine Markov control problem that results from our formulation. We also provide numerical illustrations with plausible parametric configurations to generate more insight into our model. Our results are broadly in line with the conventional wisdom of Phillips curve, with inflation and unemployment being roughly negatively related. The growth rate is, as expected, negatively related to the unemployment. We observe that, in the sequel, it is the lowering of the rate of inflation that provides support for the ruling party. Thus, electoral pressures drive the government to engage in cost control rather than productive investment (e.g., boosting employment or output growth). [ABSTRACT FROM AUTHOR]

Copyright of Investigación Económica is the property of Universidad Nacional Autonoma de Mexico, Facultad de Economia and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The purpose of this article is to present the issue of algorithms of the change detection model for the political business cycle. Political business cycle issue is interesting in the context of the current political situation in Europe, ie, the progressive integration of the European Union countries and the wave of financial problems that affected the state, which has been regarded so far as economically stable. Monitoring of this phenomenon is characterized by the fact that we do not usually have full information about the behavior of business indexes before and after the change. It is assumed that we are observing a stochastic sequence whose mathematical model predicts a sudden change. The process is Markovian when the change moment is given. The initial problem of disorder detection is transformed to the optimal stopping of the observed sequence. In order to construct an algorithm for estimating the moment of change, we transform the task into an equivalent problem of optimal stopping based on the observed magnitude and some statistics. The analysis obtained from the transformation of the problem is the source of the change point estimation algorithms. The formula for the optimal decision functions is derived. [ABSTRACT FROM AUTHOR]

Members of parliament (MPs) often set their own salaries. Voters dislike self-serving politicians, and politicians are keen to please voters. In line with political business cycle theories, politicians thus may delay giving themselves a salary increase until after elections. We investigate electoral cycles in the salary increases of German state MPs. Using data for 15 states over the period 1980-2014, we find no evidence that increases in MP salaries are influenced by election cycles. Politicians can increase their salaries at any point during the legislative period without negative consequences. We posit that this may be because even those voters who are most disenchanted with politics likely understand that all politicians benefit from a salary increase and thus do not punish the governing party at the polls. [ABSTRACT FROM AUTHOR]

Purpose The purpose of this paper is to understand both the incidence and the impact of the African political business cycle (PBC) in the light of a literature which has argued that, with major extensions of democracy since the 1990s, the cycle has both become more intense and has made African political systems more fragile. It answers two very important macroeconomic questions crucial to the validity of the opportunistic model. It, first, answers the question of whether election cycles contribute to money growth in the light of government expenditure, and second, whether election cycles have an effect on economic growth in the light of money supply.Design/methodology/approach The study employs data from 39 African countries from 1990 to 2014 to address these important empirical questions using panel regression techniques.Findings The paper found PBC to be present in Africa. It also found that such cycles do not translate to economic performance in African countries. The paper therefore indicates the need for African policy makers to take measures to eliminate or lessen the scale of PBCs.Social implications There are many ways in which today’s political choices affect future well-being. Recently, economists have concluded that we pass on the inflationary (or deflationary) consequences of current policies to the future generation.Originality/value This paper is unique in its approach to investigate the objectives. [ABSTRACT FROM AUTHOR]

Abstract: We analyze the effects of opportunistic and partisan politics on the licensing of construction activities, which in turn determines the level of housing supply. In line with Political Business Cycle theory, we hypothesize that the municipal incumbent may manipulate the supply of construction permits before (general and local) elections in order to boost economic activity and voter satisfaction, or to accommodate special‐interest groups. Our findings, based on time‐series data from post‐socialist Tirana (Albania), are consistent with opportunistic and partisan incentives’ creating cycle effects in the licensing of construction permits. However, we find that the direction of opportunistic election cycles depends critically on the interaction between the municipal incumbent and the central‐level government. Our paper raises important questions about the effects of transition politics on spatial development in post‐socialist cities. [ABSTRACT FROM AUTHOR]