Skip to main content
Log in

Public expenditures in Canadian provinces: An empirical study of politico-economic interactions

  • Published:
Public Choice Aims and scope Submit manuscript

Abstract

It is widely believed that government ideology and electoral constraints are two major factors that influence the level of public expenditures. However, Frey and Schneider argue that the effects of the two phenomena are not simultaneous. Only when a government is popular can it pursue ideological goals, and when popularity is low, energies must be redirected toward gaining support from voters to win the next election. Data draw from the Canadian provincial case are used to test empirically this hypothesis. The findings support the Frey and Schneider explanation.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Similar content being viewed by others

References

  • Abizadeh, S., & Gray, J. A. (1992). Politics and provincial government spending in Canada. Canadian Public Administration, 35(4), 519–533.

    Google Scholar 

  • Alt, J., & Chrystal, K. A. (1981). Electoral cycles, budget controls and public expenditure. Journal of Public Policy, 1(1), 37–59.

    Google Scholar 

  • Aubin, C., Berdot, J.-P., Goyeau, D., & Lafay, J.-D. (1988). The growth of public expenditure in France. In J. A. Lybeck & M. Henrekson (Eds.), Explaining the Growth of Government (pp. 201–230). Amsterdam: North-Holland.

  • Beck, N., & Katz, J. N. (1995). What to do (and not to do) with time-series cross-section data. American Political Science Review, 89(3), 634–647.

    Google Scholar 

  • Blais, A., Blake, D., & Dion, S. (1993). Do parties make a difference? Parties and the size of government in liberal democracies. American Journal of Political Science, 37(1), 40–62.

    Google Scholar 

  • Blais, A., & Nadeau, R. (1992). The electoral budget cycle. Public Choice, 74(4), 389–403.

    Google Scholar 

  • Browning, R. X. (1985). Presidents, congress, and policy outcomes: U.S. social welfare expenditures, 1949–77. American Journal of Political Science, 29(2), 197–216.

    Google Scholar 

  • Cameron, D. R. (1978). The expansion of the public economy: A comparative analysis. American Political Science Review, 72, 1243–1261.

    Google Scholar 

  • Castles, F. G. (1982a). The impact of parties on public expenditure. In F. G. Castles (Ed.), The Impact of Parties: Politics and Policies in Democratic Capitalist States (pp. 21–96). London: Sage.

    Google Scholar 

  • Castles, F. G. (1982b). Introduction: Politics and public policy. In F. G. Castles (Ed.), The Impact of Parties: Politics and Policies in Democratic Capitalist States (pp. 1–18). London: Sage.

    Google Scholar 

  • Cusack, T. R. (1997). Partisan politics and public finance: Changes in public spending in the industrialized democracies, 1955–1989. Public Choice, 91(3–4), 375–395.

    Google Scholar 

  • De Haan, J., & Sturm, J.-E. (1994). Political and institutional determinants of fiscal policy in the European community. Public Choice, 80, 157–172.

    Google Scholar 

  • Delorme, R., & André, C. (1983). L'État et l'économie: un essai d'explication de l'évolution des dépenses publiques en France (1870–1980). Paris: Éditions du Seuil.

  • Devine, J. A. (1985). State and state expenditure: Determinants of social investment and social consumption spending in the postwar United Sates. American Sociological Review, 50, 150–165.

    Google Scholar 

  • Dickson, V., & Yu, W. (1997). Spending by Canadian provincial governments: An empirical analysis. Public Finance, 52(2): 145–160.

    Google Scholar 

  • Franzese, R. J. J. (2002). Electoral and partisan cycles in economic policies and outcomes. Annual Review of Political Science, 5, 369–421.

    Article  Google Scholar 

  • Frey, B. S., & Schneider, F. (1978a). A politico-economic model of the United Kingdom. The Economic Journal, 88, 243–253.

    Google Scholar 

  • Frey, B. S., & Schneider, F. (1978b). An empirical study of politico-economic interaction in the United States. The Review of Economics and Statistics, 60, 174–183.

    Google Scholar 

  • Frey, B. S., & Schneider, F. (1979). A econometric model with an endogenous government sector. Public Choice, 34(1), 29–43.

    Google Scholar 

  • Galli, E., & Rossi, S. P. S. (2002). Political budget cycles: The case of the Western German Länder. Public Choice, 110(3/4), 283–303.

    Article  Google Scholar 

  • Golden, D. G., & Poterba, J. M. (1980). The price of popularity: The political business cycle reexamined. American Journal of Political Science, 24(4), 696–714.

    Google Scholar 

  • Griffin, L. J., Devine, J. A., & Wallace, M. (1983). On the economic and political determinants of welfare spending in the post-World War II era. Politics and Society, 12(3), 331–372.

    Google Scholar 

  • Haynes, S. E., & Stone, J. A. (1990). Political models of the business cycle should by revived. Economic Inquiry, 28, 442–465.

    Google Scholar 

  • Hibbs, D. A. J. (1977). Political parties and macroeconomic policy. American Political Science Review, 71, 1467–1487.

    Google Scholar 

  • Hibbs, D. A. J. (1992). Partisan theory after fifteen years. European Journal of Political Economy, 8, 361–373.

    Article  Google Scholar 

  • Hicks, A. M., & Swank, D. H. (1992). Politics, institutions, and welfare spending in industialized democracies, 1960–1982. American Political Science Review, 86(3), 658–674.

    Google Scholar 

  • Holsey, C. M., & Borcherding, T. E. (1997). Why does government's share of national income grow? An assessment of the recent literature on the U.S. experience. In D. C. Mueller (Ed.), Perspectives on Public Choice: A Handbook (pp. 562–589). Cambridge: Cambridge University Press.

    Google Scholar 

  • Imbeau, L. M., Pétry, F., Crête, J., Tellier, G., & Clavet, M. (2001). Measuring government growth in the Canadian provinces: Decomposing real growth and deflator effects. Canadian Public Policy, 27(1), 39–52.

    Google Scholar 

  • Imbeau, L. M., Pétry, F., & Lamari, M. (2001). Left-right party ideology and government policies: A meta-analysis. European Journal of Political Research, 40, 1–29.

    Article  Google Scholar 

  • Kamlet, M. S., & Mowery, D. C. (1987). Influences on executive and congressional budgetary priorities, 1955–1981. The American Political Science Review, 81(1), 155–178.

    Google Scholar 

  • Kneebone, R. D., & McKenzie, K. J. (2001). Electoral and partisan cycles in fiscal policy: An examination of Canadian provinces. International Tax and Public Finance, 8, 753–774.

    Article  Google Scholar 

  • Kohno, M., & Nishizawa, Y. (1990). A study of the electoral business cycle in Japan: Elections and government spending on public construction. Comparative Politics, 22(2), 151–166.

    Google Scholar 

  • Lachapelle, G. (1994). La croissance de l'État-providence dans les provinces canadiennes (1950–1981); analyse des déterminants. In J. Crête, L. M. Imbeau, & G. Lachapelle (Eds.), Politiques Provinciales Comparées (pp. 115–148). Sainte-Foy: Presses de l'Université Laval.

    Google Scholar 

  • Larkey, P. D., Stolp, C., & Winer, M. (1981). Theorizing about the growth of government: A research assessment. Journal of Public Politics, 1(2), 157–220.

    Google Scholar 

  • Lewis-Beck, M. S., & Rice, T. W. (1985). Government growth in the United States. The Journal of Politics, 47(1), 3–30.

    Google Scholar 

  • Lybeck, J. A. (1986). The Growth of Government in Developed Economies. Aldershot (England): Gower.

    Google Scholar 

  • MacRae (1977). A political model of the business cycle. Journal of Political Economy, 85(2), 239–263.

    Google Scholar 

  • McAllister, J. A. (1989). Do parties make a difference? In A. G. Gagnon & A. B. Tanguay (Eds.), Canadian Parties in Transition. Discourse, Organization, and Representation (pp. 485–511). Scarborough: Nelson Canada.

    Google Scholar 

  • Midtbø, T. (1999). The impact of parties, economic growth, and the public sector expansion: A comparison of long-term dynamics in the Scandinavian and Anglo-American democracies. European Journal of Political Research, 35, 199–223.

    Article  Google Scholar 

  • Mueller, D. C. (2003). Public Choice III. Cambridge: Cambridge University Press.

    Google Scholar 

  • Nordhaus, W. D. (1975). The political business cycle. Review of Economic Studies, 42, 169–190.

    Google Scholar 

  • Normandin, P. G. (Ed.) Canadian parliamentary guide. Ottawa.

  • Paldam, M. (1997). Political business cycles. In D. C. Mueller (Ed.), Perspectives on Public Choice: A Handbook (pp. 342–370). Cambridge: Cambridge University Press.

    Google Scholar 

  • Pétry, F., Imbeau, L. M., Crête, J., & Clavet, M. (1999). Electoral and partisan cycles in the Canadian provinces. Canadian Journal of Political Science, 32(2), 273–292.

    Google Scholar 

  • Renaud, P. S. A., & van Winden, F. A. A. M. (1987). On the importance of elections and ideology for government policy in a multi-party system. In M. J. Holler (Ed.), The Logic of Multiparty Systems (pp. 191–207). Dordrecht: Kluwer Academic Publisher.

    Google Scholar 

  • Rice, T. W. (1986). The determinants of Western European government growth. Comparative Political Studies, 19(2), 233–257.

    Google Scholar 

  • Rogoff, K. (1990). Equilibrium political budget cycles. The American Economic Review, 80(1), 21–36.

    Google Scholar 

  • Rogoff, K., & Sibert, A. (1988). Elections and macroeconomic policy cycles. Review of Economic Studies, 55, 1–16.

    Google Scholar 

  • Schmidt, M. G. (1996). When parties matter: A review of the possibilities and limits of partisan influence on public policy. European Journal of Political Research, 30(2), 155–183.

    Google Scholar 

  • Schneider, F., & Pommerehne, W. W. (1980). Politico-economic interaction in Australia: Some empirical evidence. Economic Record, 56(1), 113–131.

    Google Scholar 

  • Schuknecht, L. (2000). Fiscal policy cycles and public expenditure in developing countries, Public Choice, 102, 115–130.

    Google Scholar 

  • Schultz, K. A. (1995). The politics of the political business cycle. British Journal of Political Science, 25(1), 79–99.

    Google Scholar 

  • Serletis, A., & Afxentiou, P. C. (1998). Electoral and partisan cycle regularities in Canada. Canadian Journal of Economics, 31(1), 28–46.

    Google Scholar 

  • Simeon, R., & Miller, E. R. (1980). Regional variations in public policy. In R. Simeon & D. J. Elkins (Eds.), Small Worlds: Provinces and Parties in Canadian Political Life (pp. 242–284). Toronto: Methuen.

    Google Scholar 

  • Sø rensen, R. J. (1988). The growth of public spending in Norway, 1865–1985. In J. A. Lybeck & M. Henrekson (Eds.), Explaining the Growth of Government (pp. 265–298). Amsterdam: North-Holland.

    Google Scholar 

  • Swank, D. H. (1992). Electoral and partisan influences on Australian fiscal policy from Menzies to Hawke. Australian Journal of Political Science, 27(3), 414–433.

    Google Scholar 

  • Van Dalen, H. P., & Swank, O. H. (1996). Government spending cycles: ideological or opportunistic?s Public Choice, 89, 179–200.

    Google Scholar 

  • Whistler, D., White, K. J., Wong, S. D., & Bates, D. (2004). SHAZAM User's reference Manual Version 10. Vancouver: Northwest Econometrics.

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Geneviève Tellier.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Tellier, G. Public expenditures in Canadian provinces: An empirical study of politico-economic interactions. Public Choice 126, 367–385 (2006). https://doi.org/10.1007/s11127-006-2455-x

Download citation

  • Accepted:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11127-006-2455-x

Keywords

Navigation