French Politics

, Volume 17, Issue 3, pp 307–339 | Cite as

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

  • Mamadou BoukariEmail author
Original Article


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.


Vote function Opportunism Political budget cycles System estimation Municipalities France 

JEL classification

D72 E32 H72 



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.


  1. Aidt, T., F. Veiga, and L. Veiga. 2011. Election results and opportunistic policies: A new test of the rational political business cycle model. Public Choice 148: 21–44.CrossRefGoogle Scholar
  2. Akhmedov, A., and E. Zhuravskaya. 2004. Opportunistic political cycles: Test in a young democracy setting. Quarterly Journal of Economics 119: 1301–1338.CrossRefGoogle Scholar
  3. Alt, J., and D. Lassen. 2006. Transparency, political polarization, and political budget cycles in OECD countries. American Journal of Political Science 50(3): 530–550.CrossRefGoogle Scholar
  4. Alt, J., and S.S. Rose. 2009. Context-conditional political budget cycles. In The Oxford handbook of comparative politics, ed. C. Boix and S.C. Stokes. Oxford: Oxford University Press.Google Scholar
  5. Balaguer-Colla, M.T., M.I. Brun-Martosa, A. Forteb, and E. Tortosa-Ausina. 2015. Local governments’ re-election and its determinants: New evidence based on a Bayesian approach. European Journal of Political Economy 39(1): 94–108.CrossRefGoogle Scholar
  6. Belsley, D.A. 1988. Two- or three-stage least squares? Computer Science in Economics and Management 1(1): 21–30.CrossRefGoogle Scholar
  7. Binet, M., and J.-S. Pentecôte. 2004. Tax degression and political budget cycle in French municipalities. Applied Economics Letters 11: 905–908.CrossRefGoogle Scholar
  8. Blundell, R., and S. Bond. 1998. Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics 87: 115–143.CrossRefGoogle Scholar
  9. Brender, A. 2003. The effect of fiscal performance on local government election results in Israel: 1989–1998. Journal of Public Economics 87: 2187–2205.CrossRefGoogle Scholar
  10. Cassette, A., and E. Farvaque. 2014. Are elections debt brakes? Evidence from French municipalities. Economic Letters 122(2): 314–316.CrossRefGoogle Scholar
  11. Dalton, R.J. 2008. The quantity and the quality of party systems. Comparative Political Studies 41(7): 899–920.CrossRefGoogle Scholar
  12. Dassonneville, R., E. Claes, and M.S. Lewis-Beck. 2016. Punishing local incumbents for the local economy: economic voting in the 2012 Belgian municipal elections. Italian Political Science Review/Rivista Italiana di Scienza Politica 46(1): 3–22.CrossRefGoogle Scholar
  13. Downs, A. 1957. An economic theory of democracy. New York: Harper and Row.Google Scholar
  14. Drazen, A., and M. Eslava. 2010. Electoral manipulation via voter-friendly spending: Theory and evidence. Journal of Development Economics 92(1): 39–52.CrossRefGoogle Scholar
  15. Dubois, E. 2016. Political business cycles 40 years after Nordhaus. Public Choice 166(1–2): 235–259.CrossRefGoogle Scholar
  16. Efthyvoulou, G. 2012. Political budget cycles in the European Union and the impact of political pressures. Public Choice 153(3): 295–327.CrossRefGoogle Scholar
  17. Eslava, M. 2011. The political economy of fiscal deficits: A survey. Journal of Economic Surveys 25(4): 645–673.CrossRefGoogle Scholar
  18. Farvaque, E., and N. Jean. 2007. Analyse économique des élections municipales: Le cas de la France (1983–2001). Revue d’Économie Régionale et Urbaine 5: 945–961.CrossRefGoogle Scholar
  19. Fiva, J.H., and G.J. Natvik. 2013. Do re-election probabilities influence public investment? Public Choice 157(1): 305–331.CrossRefGoogle Scholar
  20. Foucault, M., and A. François. 2005. La politique influence-t-elle les décisions publiques locales? Analyse empirique des budgets communaux de 1977 à 2001. Revue Politiques et Management Public 23(3): 1–22.CrossRefGoogle Scholar
  21. Foucault, M., T. Madies, and S. Paty. 2008. Public spending interactions and local politics: Empirical evidence from French municipalities. Public Choice 137(1–2): 57–80.CrossRefGoogle Scholar
  22. Frey, B., and F.G. Schneider. 1978. An empirical study of politico-economic interaction in the United States. Review of Economics and Statistics 60(2): 174–183.CrossRefGoogle Scholar
  23. Gonzalez, M. 2002. Do changes in democracy affect the political budget cycle? Evidence from Mexico. Review of Development Economics 6(2): 204–224.CrossRefGoogle Scholar
  24. Greene, W.H. 2000. Econometric Analysis. 4th ed. Upper Saddle River: Prentice-Hall.Google Scholar
  25. Hanusch, M., and D.B. Magleby. 2014. Popularity, polarization, and political budget cycles. Public Choice 159(3): 457–467.CrossRefGoogle Scholar
  26. Joanis, M. 2011. The road to power: Partisan loyalty and the centralized provision of local infrastructure. Public Choice 146(1–2): 117–143.CrossRefGoogle Scholar
  27. Jones, M.P., O. Meloni, and M. Tommasi. 2012. Voters as fiscal liberals: Incentives and accountability in federal systems. Economics and Politics 24(2): 135–156.CrossRefGoogle Scholar
  28. Kneebone, R., and K. McKenzie. 2001. Electoral and partisan cycles in fiscal policy: An examination of Canadian provinces. International Tax and Public Finance 8: 753–774.CrossRefGoogle Scholar
  29. Mandon, P., and A. Cazals. 2018. Political budget cycles: Manipulation from leaders or manipulation from researchers? Evidence from a meta-regression analysis. Journal of Economic Surveys 33(1): 274–308.CrossRefGoogle Scholar
  30. Martin, P. 1996. Existe-t-il en France un cycle électoral municipal? Revue Française de Science Politique 46(6): 961–995.CrossRefGoogle Scholar
  31. Martinez, L. 2009. A theory of political cycles. Journal of Economic Theory 144: 1166–1186.CrossRefGoogle Scholar
  32. Nickell, S. 1981. Biases in dynamic models with fixed effects. Econometrica 49: 1417–1426.CrossRefGoogle Scholar
  33. Nordhaus, W. 1975. The political business cycle. Review of Economic Studies 42: 169–190.CrossRefGoogle Scholar
  34. Peltzman, S. 1992. Voters as fiscal conservatives. Quarterly Journal of Economics CVII(May): 327–361.CrossRefGoogle Scholar
  35. Pettersson-Lidblom, P. 2001. An empirical investigation of the strategic use of debt. Journal of Political Economy 109: 570–583.CrossRefGoogle Scholar
  36. Philips, A.Q. 2016. Seeing the forest through the trees: A meta-analysis of political budget cycles. Public Choice 168(3): 313–341.CrossRefGoogle Scholar
  37. Price, S. 1998. Comment on the politics of the political business cycle. British Journal of Political Science 28(01): 185–222.CrossRefGoogle Scholar
  38. Rogoff, K. 1990. Equilibrium political budget cycles. American Economic Review 80: 21–36.Google Scholar
  39. Rogoff, K., and A. Sibert. 1988. Elections and macroeconomic policy cycles. Review of Economic Studies 55: 1–16.CrossRefGoogle Scholar
  40. Sakurai, S., and N. Menezes-Filho. 2008. Fiscal policy and reelection in Brazilian municipalities. Public Choice 137: 301–314.CrossRefGoogle Scholar
  41. Schultz, K.A. 1995. The politics of the political business cycle. British Journal of Political Science 25(1): 79–99.CrossRefGoogle Scholar
  42. Shi, M., and J. Svensson. 2003. Political budget cycles: A review of recent developments. Nordic Journal of Political Economy 29(1): 67–76.Google Scholar
  43. Shi, M., and J. Svensson. 2006. Political budget cycles: Do they differ across countries and why? Journal of Public Economics 90: 1367–1389.CrossRefGoogle Scholar
  44. Veiga, L.G., and F.J. Veiga. 2007. Does opportunism pay off? Economics Letters 96: 177–182.CrossRefGoogle Scholar
  45. Veiga, L.G., and F.J. Veiga. 2013. Intergovernmental fiscal transfers as pork barrel. Public Choice 155(3): 335–353.CrossRefGoogle Scholar

Copyright information

© Springer Nature Limited 2019

Authors and Affiliations

  1. 1.Faculté des Sciences Economiques et de Gestion (FaSEG)Université de KaraKaraTogo
  2. 2.LEM (CNRS-UMR 9221) - Université de LilleVilleneuve d’AscqFrance

Personalised recommendations