Political Budget Cycles Revisited: Testing the Signalling Process

A widespread view in the ‘political budget cycles’ literature is that incumbent politicians seek to influence voters’ perceptions of their competence and/or preferences by using the composition of the fiscal budget as a signalling tool. However, little is known about whether voters actually receive...

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Bibliographic Details
Published in:MAGKS - Joint Discussion Paper Series in Economics (Band 14-2020)
Main Authors: García, Israel, Hayo, Bernd
Format: Article
Language:English
Published: Philipps-Universität Marburg 2020
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Online Access:PDF Full Text
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Summary:A widespread view in the ‘political budget cycles’ literature is that incumbent politicians seek to influence voters’ perceptions of their competence and/or preferences by using the composition of the fiscal budget as a signalling tool. However, little is known about whether voters actually receive and perceive the signal in that way. To empirically assess the relevance of the signalling channel at the municipal level, we conducted a survey among 2,000 representative German citizens in 2018. Only a small fraction of voters feel well-informed about the fiscal budget signal and use the information it contains to decide whether to vote for the incumbent politician. Persons paying more attention to the signal sent by local politicians live in smaller municipalities, are more satisfied with their economic situation, are more educated, and do not feel that they are being electorally manipulated. Our analysis raises doubt about the relevance of budget composition as a signalling mechanism for voters at the local level.
Physical Description:44 Pages
ISSN:1867-3678
DOI:10.17192/es2024.0641