Political Budget Cycles: The Case of the Western German Laender

This paper focuses on the issue of the electoral and ideological cycles in state government budget for the eleven Western German Länder. We verify this hypothesis over the period 1974–1994 for the following budgetary variables: total expenditures, surplus/deficit, administration, health care, education, roads and social security benefits. While overall our results seem to show that generally the party variable does not play a systematic role in spending decisions, they provide some support to the opportunistic cycle theory showing that the only relevant phenomenon is the effect of the upcoming election on the government spending inclinations.