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The purpose of this study is to test the relationship between local elections and local government budgets. Using dataset of all Macedonian municipalities for the period 2007-2015, this study examines whether the overall spending and the composition of local government expenditures are systematically manipulated just before elections. The results show that spending during the pre-election period shifts toward more desirable categories such as permanent and temporary employment, capital projects, and individual transfers and subsidies. Very few studies relate pre-electoral fiscal manipulation to clientelistic linkages. This paper fills the void by adding empirical evidence from a transitional democracy.

Pre-electoral fiscal policies and opportunistic spending: the case of the recently decentralised Macedonian local governments