All Issues

2 article(s) found.
Chiung-ju Huang, Associate Professor, Department of Public Finance, Feng Chia University.
Yuan-hong Ho, Professor, Department of Public Finance, Feng Chia University.
Tzu-yin Lin, MA, Department of Public Finance, Feng Chia University.
Elections, Checks and Balances and the Allocation of Public Expenditure: An Empirical Analysis of Local Government in Taiwan (in Chinese) Download
* Downloads: 18
Show abstract
Full content
Previous empirical work on political budget cycles focused solely on the dynamics of overall budget, and implicitly assumes the executive has full discretion over fiscal policy. This study goes beyond traditional political budget cycles models and shed light on the case study of 21 local governments in Taiwan over the 1984-2009 periods.

To explore how the level of checks and balances can explain the size of the political budget cycles, the political constraints index for the 21 local governments in Taiwan province is developed following the coding procedure of Henisz(2005). The law and order index from the International Country Risk Guide are used to measure compliance with the law. The proxy for effective checks and balances on executive discretionary power over the 1984 to 2009 period are established with the combination of the political constraints index and the law and order index. The impacts of elections, checks and balances on the allocation of local public expenditures over the period of 1984 to 2009 are then explored by using the generalized method of moments developed for dynamic models of the panel data of Taiwan's 21 local governments.

The empirical results show that the government would indeed adjust the budget expenditures contents to achieve their goals in the election period. Such as, the deletion of the general government budget expenditures towards the social welfare expenditure budget. By incorporating effective legislative checks and balances into the model, the effect of political budget cycles can indeed be moderated or counteracted. Regardless of whether the local government has discretion or not, it does not affect the checks and balances ability of the legislature.
Yan-kai Fu, Assistant Professor, Department of Business Administration, China Institute of Technology.
The Political-Economic Analysis on the Budgetary Decision-Making in Local Government: The View of Political Budget Cycle (in Chinese) Download
* Downloads: 17
Show abstract
Full content
This research attempts to apply political business cycle theory to observe the intention of local incumbents. Besides, through empirical research approach, the researcher hopes to gain some results, which would help to obtain better understanding of certain manipulation of politics during the year of local elections. During the research years between 1988 and 2001, the local government uses the total government budgeting dates resources from every county and city in Taiwan province, doing pooling regression analysis to observe whether during the year of county magistrates and city mayors election people manipulation fiscal policy tools to gain the ballot. The result of this paper is that, county magistrates and city mayors election have not a significant impact on the local fiscal policy tools. Nonetheless, we consider the interaction effects with the year of local elections and the first term incumbents, which have a significant impact on the local fiscal policy tools. To sum up, evidence in support of the local political budget cycle hypothesis.