A Study on Periodic Changes in Fiscal Variables Due to Elections

Abstract

This study empirically analyzes whether political rent-seeking behavior exits in Korea.The empirical analysis shows that there is a cyclical decline in aggregate revenueimmediately following the election year. However, when using other aggregate fiscalvariables including aggregate revenue, fiscal balance, tax and public burden ratio,no such cyclical deterioration are found. By sector, the expenditures of the economicaffairs show a cyclical increase in the year right after the election. In addition,as the ratio of ruling party senators to total senators is high, the expendituresof the economic affairs tend to increase more and this tendency becomes more strongerright after the presidential election year. Such a result turns out to be consistenteven when the expenditure was analyzed separately from the mandatory and discretionaryexpenditures by sector. This is a testimony to the existence of political rent-seekingbehavior in Korea.

Keywords

• 정치적 지대추구(Political Rent Seeking)
• 재정수지(Fiscal Balance)
• 선거(Election)
• 지출구성조작(Expenditure Composition Manipulation)