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The Impact of Parties and Elections on Municipal Debt Policy in Mexico

Original Article
The Impact of Parties and Elections on Municipal Debt Policy in Mexico
Authors: AL Benton and HJM Smith

First published: 17 August 2016Full publication history
DOI: 10.1111/gove.12234View/save citation
Cited by: 0 articles

Article has an altmetric score of 7

Abstract

Opportunistic electoral fiscal policy cycle theory suggests that all subnational officials will raise fiscal spending during elections. Ideological partisan fiscal policy cycle theory suggests that only left-leaning governments will raise election year fiscal spending, with right-leaning parties choosing the reverse. This article assesses which of these competing logics applies to debt policy choices. Cross-sectional time-series analysis of yearly loan acquisition across Mexican municipalities—on statistically matched municipal subsamples to balance creditworthiness across left- and right-leaning governments—shows that all parties engage in electoral policy cycles but not in the way originally thought. I…