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Voting suffrage and the political budget cycle: Evidence from the London Metropolitan Boroughs 1902-1937.

Aidt TS, Mooney G - J Public Econ (2014)

Bottom Line: We study the opportunistic political budget cycle in the London Metropolitan Boroughs between 1902 and 1937 under two different suffrage regimes: taxpayer suffrage (1902-1914) and universal suffrage (1921-1937).We argue and find supporting evidence that the political budget cycle operates differently under the two types of suffrage.Universal suffrage, where all adult residents can vote irrespective of their taxpayer status, creates demands for productive public services and the political budget cycle manifests itself in election year hikes in capital spending and a reduction in current spending.

View Article: PubMed Central - PubMed

Affiliation: Faculty of Economics, Jesus College, University of Cambridge, Cambridge CB3 9DD, United Kingdom.

ABSTRACT

We study the opportunistic political budget cycle in the London Metropolitan Boroughs between 1902 and 1937 under two different suffrage regimes: taxpayer suffrage (1902-1914) and universal suffrage (1921-1937). We argue and find supporting evidence that the political budget cycle operates differently under the two types of suffrage. Taxpayer suffrage, where the right to vote and the obligation to pay local taxes are linked, encourages demands for retrenchment and the political budget cycle manifests itself in election year tax cuts and savings on administration costs. Universal suffrage, where all adult residents can vote irrespective of their taxpayer status, creates demands for productive public services and the political budget cycle manifests itself in election year hikes in capital spending and a reduction in current spending.

No MeSH data available.


Related in: MedlinePlus

Expenditure outcomes, 1902–1914.
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f0020: Expenditure outcomes, 1902–1914.

Mentions: Table 3 reports descriptive statistics separately for the two samples and Figs. 1–6 show the average trends for the fiscal outcome variables for the fiscal years 1902–14 and 1921–37, respectively. We notice a number of important facts. First, both current income and current expenditure increase in real terms from around £15 per 1000 capita (in 1871 prices) under taxpayer suffrage to £25 per 1000 capita under universal suffrage (see Table 3). The increase in capital expenditure (and capital income) is less pronounced. Secondly, there were no particular trends in current expenditure or in spending on administration under taxpayer suffrage (Fig. 1). Likewise, current income and rate income are stable in this period (Fig. 2). A similar characterization applies to the trends under universal suffrage (Figs. 4 and 5) and we note that, on average, the LMBs' spending and taxation levels were comparable in 1914 and 1921, despite the interruption of the War and the franchise change. We do, however, observe a decline in capital expenditure (and capital income) under taxpayer suffrage in the years before the War (Figs. 1 and 2). The spike in capital expenditure in 1905 is entirely attributed to a large investment in electricity in St. Marylebone and is (more than) matched by a large increase in capital income (a big loan). Thirdly, around 1930, a marked level shift upwards in current expenditure and in rate income but not in capital expenditure, takes place. A disaggregated analysis of the data [not reported] suggests that this reflects increases in spending on streets as well as increases in wage costs. Gillespie (1989) documents how some boroughs in the 1920s used resources for public relief work and we conjecture that this endeavour was intensified during the recession years. Fourthly, we observe substantial year-on-year variation in the average current deficit (Figs. 3 and 6). Mostly the LMBs were close to balancing the books and, on average, they ran a small surplus both before and after the change in the franchise (see Table 3). This suggests that the balanced budget rule mattered, but, at the same time, allowed some flexibility for fiscal manipulations.


Voting suffrage and the political budget cycle: Evidence from the London Metropolitan Boroughs 1902-1937.

Aidt TS, Mooney G - J Public Econ (2014)

Expenditure outcomes, 1902–1914.
© Copyright Policy - CC BY
Related In: Results  -  Collection

License
Show All Figures
getmorefigures.php?uid=PMC4375611&req=5

f0020: Expenditure outcomes, 1902–1914.
Mentions: Table 3 reports descriptive statistics separately for the two samples and Figs. 1–6 show the average trends for the fiscal outcome variables for the fiscal years 1902–14 and 1921–37, respectively. We notice a number of important facts. First, both current income and current expenditure increase in real terms from around £15 per 1000 capita (in 1871 prices) under taxpayer suffrage to £25 per 1000 capita under universal suffrage (see Table 3). The increase in capital expenditure (and capital income) is less pronounced. Secondly, there were no particular trends in current expenditure or in spending on administration under taxpayer suffrage (Fig. 1). Likewise, current income and rate income are stable in this period (Fig. 2). A similar characterization applies to the trends under universal suffrage (Figs. 4 and 5) and we note that, on average, the LMBs' spending and taxation levels were comparable in 1914 and 1921, despite the interruption of the War and the franchise change. We do, however, observe a decline in capital expenditure (and capital income) under taxpayer suffrage in the years before the War (Figs. 1 and 2). The spike in capital expenditure in 1905 is entirely attributed to a large investment in electricity in St. Marylebone and is (more than) matched by a large increase in capital income (a big loan). Thirdly, around 1930, a marked level shift upwards in current expenditure and in rate income but not in capital expenditure, takes place. A disaggregated analysis of the data [not reported] suggests that this reflects increases in spending on streets as well as increases in wage costs. Gillespie (1989) documents how some boroughs in the 1920s used resources for public relief work and we conjecture that this endeavour was intensified during the recession years. Fourthly, we observe substantial year-on-year variation in the average current deficit (Figs. 3 and 6). Mostly the LMBs were close to balancing the books and, on average, they ran a small surplus both before and after the change in the franchise (see Table 3). This suggests that the balanced budget rule mattered, but, at the same time, allowed some flexibility for fiscal manipulations.

Bottom Line: We study the opportunistic political budget cycle in the London Metropolitan Boroughs between 1902 and 1937 under two different suffrage regimes: taxpayer suffrage (1902-1914) and universal suffrage (1921-1937).We argue and find supporting evidence that the political budget cycle operates differently under the two types of suffrage.Universal suffrage, where all adult residents can vote irrespective of their taxpayer status, creates demands for productive public services and the political budget cycle manifests itself in election year hikes in capital spending and a reduction in current spending.

View Article: PubMed Central - PubMed

Affiliation: Faculty of Economics, Jesus College, University of Cambridge, Cambridge CB3 9DD, United Kingdom.

ABSTRACT

We study the opportunistic political budget cycle in the London Metropolitan Boroughs between 1902 and 1937 under two different suffrage regimes: taxpayer suffrage (1902-1914) and universal suffrage (1921-1937). We argue and find supporting evidence that the political budget cycle operates differently under the two types of suffrage. Taxpayer suffrage, where the right to vote and the obligation to pay local taxes are linked, encourages demands for retrenchment and the political budget cycle manifests itself in election year tax cuts and savings on administration costs. Universal suffrage, where all adult residents can vote irrespective of their taxpayer status, creates demands for productive public services and the political budget cycle manifests itself in election year hikes in capital spending and a reduction in current spending.

No MeSH data available.


Related in: MedlinePlus