Political budget cycles in Latin America, 1982-2014.

Abstract

This paper aims to detect the presence of political budget cycles (PBuCs) around presidential elections in four large Latin American countries (Argentina, Chile, Colombia, and Mexico) over the 1982-2014 period, in the framework of democratic regimes. Extended autoregressive models are estimated for total public expenditure and their chief components, considering the effect of economic fluctuations. Among the most important findings, weak evidence of PBuCs was found in the case of Argentina and Chile, while in the case of Mexico and Colombia, post-electoral adjustments in budget items sensitive to political manipulation were found, such as subsidies and public works, along with pre-electoral increases in total expenditure in the former one, and in goods and services in the latter.