Naslov
Fiscal conservatism and re-election prospects: It is the same principle, the rest is just details

Autori
Mačkić, Velibor

Vrsta, podvrsta i kategorija rada
Radovi u zbornicima skupova, cjeloviti rad (in extenso), znanstveni

Izvornik
10th International scientific symposium Region, entrepreneurship, development / Leko Šimić, Mirna ; Crnković, Boris - Osijek : Ekonomski fakultet Sveučilišta Josipa Jurja Strossmayera u Osijeku, 2021, 189-204

Skup
10th International Scientific Symposium Region, Entrepreneurship, Development (RED 2021)

Mjesto i datum
Online, 17.06.2021

Vrsta sudjelovanja
Predavanje

Vrsta recenzije
Međunarodna recenzija

Ključne riječi
Re-election ; Fiscal conservatism ; Fiscal liberalism ; Croatian local government ; Panel data analysis

Sažetak
This paper considers the validity of the economic theory of voting in the case study of Eastern Croatia’s (Tax Administration office classification) local government units (cities and municipalities). Political economy theory offers two main explanations regarding voters’ preferences during the electoral cycle: fiscal liberalism and fiscal conservatism. While the former thesis refers to conventional wisdom in which expansionary fiscal policy increases the incumbents’ re-election prospects, the latter thesis implies that prudent fiscal behaviour is rewarded by voters. Thus the paper aims to answer two research questions. First, are voters fiscal conservatives or fiscal liberals? And second, do they have a right wing bias? The sample includes cities and selected municipalities from the following five Eastern Croatia’s counties: Virovitica-Podravina, Požega-Slavonia, Brod- Posavina, Osijek-Baranja and Vukovar-Srijem. The sample stated is interesting due to its path dependency during the 1990s (war experience) and the 2010s (emigration tendencies) which all represent important singular shocks not present to that extent in the remaining parts of Croatia. To investigate whether and how the management of public finances at the local government level affects the incumbents’ re-election prospects, the paper considers data on election outcomes in 2013 and 2017 (the last two local election cycles). With respect to the methodology, random and fixed effects probit and logit models are employed. The main result suggests that voters reward increases in total expenditures in election years, hence they are not fiscal conservatives. Additional results confirm that lower budget transparency increases the probability of the re-election of incumbents and that there is no statistically significant right wing bias among the electorate.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA