CEU Electronic Theses and Dissertations, 2008
| Author | Kalman, Judit |
|---|---|
| Title | Some Political Economy Insights to Multi-Level Government Financing Mechanisms in Hungary - Analysis of political budget cycles and partisanship in municipal investment activities and central grant distribution |
| Summary | Observation of the first and second generation of literature on fiscal decentralization together with further branches of political economy, e.g. specifically on the political economy of intergovernmental grants and the widening literature on political business cycles leads to a puzzle: decentralization is a continuing policy trend – however in reality there are downsides, institutional, political and other factors that do interfere with decision-making and can increase the chances for inefficient policy outcomes. Infrastructure investment finances –at all levels of government – are especially prone to election cycles and corruption. Driven from the above context the basic research question guiding my work is: whether local infrastructure policies in Hungary are really designed according to efficiency considerations? What politico-economic factors might affect central and local governments’ allocations on infrastructure investment? To complete this goal, a closer look at municipal capital investment financing in Hungary takes place. Related to the main research question several themes emerge and hypotheses are checked on the effects of the revenue base, local need and socioeconomic indicators on local investment strategies and financing constructions or grant allocations. Does grant financing mean a less careful financial planning? What is the importance of lobbying through different channels? I also search for - and in fact do find – evidence of electoral cycle effects and partisan considerations (effect of similarities in political color of central and local governments) in intergovernmental grant distribution and in municipal investment activities. These issues to be researched call for a mix of quantitative and qualitative methods. Some of my hypothesis are tested on limited data from a 2004 survey of city mayors in Hungary. Hypotheses on cycles, determinants of investment outlays of local governments and grant recipiency are tested with linear and Probit panel regressions respectively on a panel dataset comprehensive for all Hungarian local government budgets from 1993-2003, a period bridging three election cycles, linked with some demographic,socioeconomic data and local election data. Findings can add to the discussion on reforming local government finance system overall, on the agenda in Hungary for quite a while, but perhaps also to the new literature on the political economy of failures, delays in socially beneficial reforms. What this dissertation certainly does contribute to is the fairly small pool of international empirical evidences available on political budget cycles, especially at the sub-national level and the emerging literature on the political economy of intergovernmental grants – providing the case of one transition country that irrespective of the fact of by now being an EU member sometimes shows certain similarities to the developing ones. |
| Supervisor | Zentai, Viola (Varadi, Balazs; Hegedus, Jozsef) |
| Department | Political Science PhD |
| Full text | https://www.etd.ceu.edu/2008/pphkal27.pdf |
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