Political Budget Cycles in the European Union

GREGOR JIŘÍ. 2016. Political Budget Cycles in the European Union. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 64(2): 595–601. This paper provides research on the theme of the political budget cycles. The goal is to fi nd out whether or not the government tries to manipulate the state budget and its components for the purpose of reelection across the countries of the European Union. In order to verify this theory a dynamic panel data model was used. The results were signifi cant, but only if predetermined elections were not counted into the estimations. In that case, the theory of the political budget cycles could be accepted as valid for the EU countries. The main driving force of the political budget cycles across the countries of the European Union is fl uctuation of the government expenditures. During the election year, the government expenditures are higher, and a year a er the election, government expenditures are lower. This is refl ected into the state budget balance.