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The political budget cycle in French municipal elections: unexpected nonlinear effects

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French Politics Aims and scope

Abstract

Using a large dataset of French municipalities, this article examines the joint determination of the win margin of victory of incumbent mayors and the size of the political budget cycle. A system of two simultaneous equations is estimated with the three-stage least squares method. The main findings are twofold. First, the effects of the win margin on the size of the fiscal cycle are U-shaped. This means that, in a close election, the incumbent mayor tends to reduce public expenditure while, if the incumbent is either certain to win or to lose the election, expenditures tend to be increased. Second, another nonlinear effect is revealed, linking mayors’ time in office to their win margin of victory.

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Notes

  1. Except between 2001 and 2008, the election being postponed to avoid electoral fatigue in 2007, a year in which both the Presidential and Legislative elections were taking place.

  2. Since 2013, the threshold is reduced to 1000 inhabitants.

  3. I consider these municipalities because of the difference in the electoral rules.

  4. According to Foucault and François (2005), the implementation of local political business cycle (LPBC) on the French municipalities raises some difficulties in terms of agenda. While the municipal election is usually planned in March, the budget of year t is voted in December of t − 1 year and is theoretically applicable for year t whatever the result of election. This causes a real ambiguity concerning the importance of LPBC analysis. To limit this ambiguity, they suggest to consider that opportunistic cycles are likely to occur during the year before the election (t − 1) and/or during the year of election.

  5. Plots in Fig. 2 are stacked.

  6. Note that these are average expenditures across municipalities.

  7. The election years are 2001, 2008 and 2014. The election of 2001 is not included in the analysis whenever lags, term averages or deviations from term averages are included.

  8. In auto-regressive equations, Nickell (1981) points that the dependent variable’s coefficient is biased due to the correlation between the fixed effects and the lagged-dependent variable.

  9. 3SLS is the combination of 2SLS and SUR. It is used in a system of equations which are endogenous, i.e., in each equation endogenous variables on both the left- and right-hand sides of Eq. 2 SLS are computationally cheaper, and, whereas 3SLS is known asymptotically to be more efficient, this need not be so for small samples. 3SLS, then, becomes the estimator of choice only when (1) the researcher considers a gain in efficiency to be important relative to computational cost and (2) when the potential for such a gain is high (Belsley 1988).

  10. See Dalton (2008) for the computation of this index.

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Acknowledgements

I wish to thank the Editor and two anonymous referees. I am also grateful to Aurelie Cassette, Etienne Farvaque, Jean-Sébastien Pentecôte, Olivier Beaumais, Arnaud Rioual, Jean Baptiste Desquilbet, Stéphane Vigeant, Abdoulaye Papa Diop and Francisco José Veiga for useful comments on previous versions of this article. The usual disclaimer applies.

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  1. Faculté des Sciences Economiques et de Gestion (FaSEG), Université de Kara, BP: 43, Kara, Togo

    Mamadou Boukari

  2. LEM (CNRS-UMR 9221) - Université de Lille, 59655, Villeneuve d’Ascq, France

    Mamadou Boukari

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Boukari, M. The political budget cycle in French municipal elections: unexpected nonlinear effects. Fr Polit 17, 307–339 (2019). https://doi.org/10.1057/s41253-019-00091-9

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