THE INFLUENCE OF THE COMPETITIVENESS OF THE COUNTRIES ON THE POLITICAL BUDGET CYCLES

This paper is focused on the political budget cycles. The goal of the paper is to find out if the different competitiveness of the countries can lead to the higher or lower manipulation with the government budget from the side of the politicians. Analyzed sample was divided into three groups according to the stage of the development of the countries. There was used standard dynamic panel model. Most suitable method of estimation for dynamic panel has been a Generalized Method of Moments. Results of the estimations have confirmed the existence of the political budget cycles across all tested countries. Nevertheless, the connection of the political budget cycles and competitiveness of the countries is shown only in the causes of the political budget cycles. Less competitiveness countries have been using the government revenues as a tool for the fiscal manipulation whereas more competitiveness countries have been using the government expenditures to influence the voters before the elections.