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Political Economy

Are European politicians trying to trick voters?

In her Master Thesis Nina used empirical methods to explore government spending behavior in election years. Her results show that since the financial crisis European governments went back to attracting voters by manipulating the budget deficits in election years, compared to other years. A phenomenon that would usually no longer be expected in developed countries with educated voters.

However, in contrast to what would be predicted by standard political budget cycle theory, the data show that budget deficits are relatively smaller in election years. A possible explanation could be that, due to the financial crisis, many European voters care about their country’s budget deficits. Being relatively educated people, they believe it to be a good thing if less new debts are created by their governments. Especially in European Monetary Union countries, where discussions about breaking the Maastricht 3% rule were big in the news. Governments, seeking for being re-elected, do thus have a reason to avoid creating a large budget deficit prior to elections.

After finishing her Master Nina started working on a publication of a paper about this topic together with her former supervisor Professor Kaj Thomsson from Maastricht University.

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