Premium
The Political Budget Cycle and Subnational Debt Expenditures in Federations: Panel Data Evidence from India
Author(s) -
Sáez Lawrence
Publication year - 2016
Publication title -
governance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.46
H-Index - 76
eISSN - 1468-0491
pISSN - 0952-1895
DOI - 10.1111/gove.12130
Subject(s) - ideology , politics , debt , economics , panel data , payment , power (physics) , government (linguistics) , empirical evidence , political economy , political science , public economics , monetary economics , macroeconomics , finance , law , linguistics , philosophy , physics , epistemology , quantum mechanics , econometrics
What political variables explain variations in subnational fiscal expenditures on interest payments on the debt? The author argues that the political budget cycle and center‐right political party ideology—rather than the effective number of parties, alternation of power, ideological proximity between the central government and constituent units, or most forms of political party ideology—can help explain the level of expenditures on interest payment of subnational debt in I ndia. The core empirical finding is that significant increases in expenditures on the debt occur the year in which a state assembly election is held in I ndia.