Political cycles under external economic constraints: Evidence from Cyprus

Journal of Economics and Business, 2011, vol. 63, issue 6, 638-662

Abstract: This paper examines the presence of political cycles in a small open economy using data from Cyprus over the period 1978–2006, and explores their conditionality upon external economic constraints, such as globalization and European integration. Two basic results emerge. First, we find evidence of partisan shifts in economic policies and outcomes, although these effects seem to decrease as globalization progresses, and to disappear in the run-up to EMU. This implies that, while partisan cycles can emerge under a certain domestic political setting, the sensitivity of an economy to globalization pressures and the challenges resulting from EU/EMU membership can lead to their weakening. Second, we find evidence of electoral shifts in certain, more visible, subcomponents of the fiscal balance. However, in contrast to partisan distinctions, these opportunistic effects become more pronounced as globalization proceeds. It seems that constraints imposed on the ability of politicians to ingratiate themselves with partisans, may actually strengthen their incentives to engage in electioneering.

Keywords: Political cycles; Small-open economy; External economic constraints; Globalization; Cyprus; European Union (search for similar items in EconPapers)
JEL-codes: D72 E32 E61 F15 P16 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0148619511000269
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Political Cycles in a Small Open Economy and the Effect of Economic Integration: Evidence from Cyprus (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jebusi:v:63:y:2011:i:6:p:638-662

DOI: 10.1016/j.jeconbus.2011.04.001

Access Statistics for this article

Journal of Economics and Business is currently edited by Emanuele Bajo and Moritz Ritter

More articles in Journal of Economics and Business from Elsevier
Bibliographic data for series maintained by Catherine Liu ().