Democracy, elections and allocation of public expenditures in developing countries

This paper goes beyond traditional political budget cycles models, focusing solely on the dynamics of the overall budget, in order to shed light on electoral composition changes in public spending. Using data on 42 developing countries from 1975 to 2001, 1 find evidence of electoral impacts on the allocation of public expenditures. The results show that election-year public spending shifts towards more visible current expenditures, in particular wages and subsidies. and away from capital expenditures. Furthermore, the findings suggest that electoral impacts on the allocation of public spending are likely to endure, even though countries gain experience in electoral politics. (C) 2008 Elsevier B.V. All rights reserved.