Society and Economy
Volume/Issue:
Volume 36: Issue 2
Fiscal cycle effects in the pattern of the Hungarian state expenditures
Author:
Ágnes Halász University of Debrecen Doctoral School of Economic Science Debrecen Hungary

Search for other papers by Ágnes Halász in
Current site
Google Scholar
PubMed Close
Pages:
263–283
Online Publication Date:
05 Jun 2014
Publication Date:
01 Jun 2014
Article Category:
Research Article
DOI:
https://doi.org/10.1556/socec.36.2014.2.7
Keywords:
political budget cycles; state expenditures; new democracy; Hungary; D72; E62; H3
Restricted access

In this paper we aim to investigate what role fiscal cycles played in the development of the Hungarian state budget balances since the change of regime in 1989 until the parliamentary elections held in 2010. The literature has found that political budget cycles (PBC) are more typical in less developed countries with a shorter period of experience with democratic institutions, like the post-socialist transition economies. Nevertheless, empirical studies point out that this phenomenon has been disappearing over time. By testing the six parliamentary elections in Hungary until 2010, we show that discretional governmental actions of pork barrel spending were apparent more or less in almost each election period, peaking in the last decade. The most typical form of the fiscal cycles in Hungary proved to be social transfers to households including old-age benefits, family support or price subsidies, but also public sector wages were subject to PBC. As a result, state budget balances were significantly shaped by the cyclical movements of fiscal laxity and restrictions, resulting in strong fluctuations in fiscal balances and an overall high budget deficits in the two decades under review.

  • Alesina, A. (1988): Macroeconomics and Politics. In: Fischer, S. (eds): NBER Macroeconomics Annual, Volume 3. MIT Press.

  • Alesina, A. — Roubini, N. (1992): Political Cycles in OECD Economies. The Review of Economic Studies 59(4): 663–688.

    Roubini N. , 'Political Cycles in OECD Economies ' (1992 ) 59 The Review of Economic Studies : 663 -688 .

    • Search Google Scholar

  • Alesina, A. — Sachs, J. (1988): Political Parties and the Business Cycle in the United States, 1948–1984. Journal of Money, Credit and Banking 20(1): 63–82.

    Sachs J. , 'Political Parties and the Business Cycle in the United States, 1948–1984 ' (1988 ) 20 Journal of Money, Credit and Banking : 63 -82 .

    • Search Google Scholar

  • Alesina, A. — Mirrlees, J. — Neumann, M. (1989): Politics and Business Cycles in Industrial Democracies. Economic Policy 4(8): 55–98.

    Neumann M. , 'Politics and Business Cycles in Industrial Democracies ' (1989 ) 4 Economic Policy : 55 -98 .

    • Search Google Scholar

  • Alt, J. — Chrystal, K. A. (1981): Electoral Cycles, Budget Controls and Public Expenditure. Journal of Public Policy 1(1): 37–59.

    Chrystal K. A. , 'Electoral Cycles, Budget Controls and Public Expenditure ' (1981 ) 1 Journal of Public Policy : 37 -59 .

    • Search Google Scholar

  • Alt, J. — Lassen, D. (2006): Transparency, Political Polarization, and Political Budget Cycles in OECD Countries. American Journal of Political Science 50(3): 530–550.

    Lassen D. , 'Transparency, Political Polarization, and Political Budget Cycles in OECD Countries ' (2006 ) 50 American Journal of Political Science : 530 -550 .

    • Search Google Scholar

  • Ames, B. (1987): Political Survival. Berkeley: University of California Press.

    Ames B. , '', in Political Survival , (1987 ) -.

  • Andrikopoulos, A. — Loizides, I. — Prodromidis, K. (2004): Fiscal Policy and Political Business Cycles in the EU. European Journal of Political Economy 20(1): 125–152.

    Prodromidis K. , 'Fiscal Policy and Political Business Cycles in the EU ' (2004 ) 20 European Journal of Political Economy : 125 -152 .

    • Search Google Scholar

  • Benczes, I. (2008): Trimming the Sails. Budapest — New York: CEU Press.

    Benczes I. , '', in Trimming the Sails , (2008 ) -.

  • Benczes, I. (2011): Market Reform and Fiscal Laxity in Communist and Post-communist Hungary: A Path-dependent Approach. International Journal of Emerging Markets 6(2): 118–131.

    Benczes I. , 'Market Reform and Fiscal Laxity in Communist and Post-communist Hungary: A Path-dependent Approach ' (2011 ) 6 International Journal of Emerging Markets : 118 -131 .

    • Search Google Scholar

  • Benczes, I. — Kutasi, G. (2010): Költségvetési pénzügyek [Fiscal finance]. Budapest: Akadémia Kiadó.

    Kutasi G. , '', in Költségvetési pénzügyek [Fiscal finance] , (2010 ) -.

  • Benczes, I. — Ürögdi, A. (2008): A politikai költségvetési ciklusok új elmélete és empíriája [The new theory and empirics of political budgetary cycles]. Pénzügyi Szemle 53(2): 265–279.

    Ürögdi A. , 'A politikai költségvetési ciklusok új elmélete és empíriája [The new theory and empirics of political budgetary cycles] ' (2008 ) 53 Pénzügyi Szemle : 265 -279 .

    • Search Google Scholar

  • Block, S. A. (2002): Political Business Cycles, Democratization, and Economic Reform: The Case of Africa. Journal of Development Economics 67(1): 205–228.

    Block S. A. , 'Political Business Cycles, Democratization, and Economic Reform: The Case of Africa ' (2002 ) 67 Journal of Development Economics : 205 -228 .

    • Search Google Scholar

  • Brender, A. — Drazen, A. (2003): Where Does the Political Budget Cycle Really Come from? CEPR Discussion Papers No. 4049.

    Drazen A. , '', in Where Does the Political Budget Cycle Really Come from , (2003 ) -.

  • Convergence Programme (2004): Convergence Programme of Hungary 2004. Budapest: Government of the Republic of Hungary.

    '', in Convergence Programme of Hungary 2004 , (2004 ) -.

  • Convergence Programme (2005): Updated Convergence Programme of Hungary 2005–2008. Budapest: Government of the Republic of Hungary.

    '', in Updated Convergence Programme of Hungary 2005–2008 , (2005 ) -.

  • Convergence Programme (2006): Convergence Programme of Hungary 2006–2010. Budapest: Government of the Republic of Hungary.

    '', in Convergence Programme of Hungary 2006–2010 , (2006 ) -.

  • Convergence Programme (2007): Updated Convergence Programme of Hungary 2007–2011. Budapest: Government of the Republic of Hungary.

    '', in Updated Convergence Programme of Hungary 2007–2011 , (2007 ) -.

  • Drazen, A. (2001): The political Business Cycles after 25 years. In: Bernanke, B. — Rogoff, K. (eds): NBER Macroeconomics Annual 2000, Volume 15. Boston: MIT Press.

  • Drazen, A. (2000): Political Economy in Macroeconomics. Princeton, NJ: Princeton University Press.

    Drazen A. , '', in Political Economy in Macroeconomics , (2000 ) -.

  • Drazen, A. — Eslava, M. (2006): Pork Barrel Cycles. NBER Working Paper No. 12190.

    Eslava M. , '', in Pork Barrel Cycles , (2006 ) -.

  • EBRD (1997): Transition Report. London: EBRD.

    '', in Transition Report , (1997 ) -.

  • Economist Intelligence Unit (1998a): Country Report Hungary, March. London: EIU.

    '', in Country Report Hungary , (1998 ) -.

  • Economist Intelligence Unit (1998b): Country Report Hungary, June. London: EIU.

    '', in Country Report Hungary , (1998 ) -.

  • Economist Intelligence Unit (1999a): Country Report Hungary, March. London: EIU.

    '', in Country Report Hungary , (1999 ) -.

  • Economist Intelligence Unit (1999b): Country Report Hungary, May. London: EIU.

    '', in Country Report Hungary , (1999 ) -.

  • Economist Intelligence Unit (1999c): Country Report Hungary, September. London: EIU.

    '', in Country Report Hungary , (1999 ) -.

  • Economist Intelligence Unit (2000a): Country Report Hungary, August. London: EIU.

    '', in Country Report Hungary , (2000 ) -.

  • Economist Intelligence Unit (2000b): Country Report Hungary, November. London: EIU.

    '', in Country Report Hungary , (2000 ) -.

  • Economist Intelligence Unit (2002a): Country Report Hungary, February. London: EIU.

    '', in Country Report Hungary , (2002 ) -.

  • Economist Intelligence Unit (2002b): Country Report Hungary, May. London: EIU.

    '', in Country Report Hungary , (2002 ) -.

  • Economist Intelligence Unit (2002c): Country Report Hungary, November. London: EIU.

    '', in Country Report Hungary , (2002 ) -.

  • Economist Intelligence Unit (2004a): Country Report Hungary, August. London: EIU.

    '', in Country Report Hungary , (2004 ) -.

  • Economist Intelligence Unit (2004b): Country Report Hungary, November. London: EIU.

    '', in Country Report Hungary , (2004 ) -.

  • Economist Intelligence Unit (2005a): Country Report Hungary, August. London: EIU.

    '', in Country Report Hungary , (2005 ) -.

  • Economist Intelligence Unit (2006): Country Report Hungary, August. London: EIU.

    '', in Country Report Hungary , (2006 ) -.

  • Economist Intelligence Unit (2008): Country Report Hungary, December. London: EIU.

    '', in Country Report Hungary , (2008 ) -.

  • Economist Intelligence Unit (2009a): Country Report Hungary, April. London: EIU.

    '', in Country Report Hungary , (2009 ) -.

  • Economist Intelligence Unit (2009b): Country Report Hungary, July. London: EIU.

    '', in Country Report Hungary , (2009 ) -.

  • European Commission (2012): European Economy, Statistical Annex, Spring. Brussels: European Commission.

    '', in European Economy, Statistical Annex , (2012 ) -.

  • Farkas, J. — Hegedûs, J. — Székely, G. (2004): Lakáshelyzet, lakástámogatások, 1999–2003 [Support for home buying]. In: Kolosi, T. — Tóth, I. Gy. — Vukovich, Gy. (eds): Társadalmi Riport 2004 [Social Report 2004]. Budapest: TÁRKI.

    Székely G. , '', in Társadalmi Riport 2004 [Social Report 2004] , (2004 ) -.

  • Ferge, Z. (2006): Kiket és mit szolgál a 100 lépés program? — Ellentmondásos elõrelépések [Who and what does the 100 steps program serve? — Contradictory progress]. In: Tausz, K. (ed.): Atársadalmi kohézió erõsítése [Strengthening social cohesion]. Budapest: Új Mandátum.

    Ferge Z. , '', in Atársadalmi kohézió erõsítése [Strengthening social cohesion] , (2006 ) -.

  • Gál, R. I. (2008): A nyugdíjrendszer politikai kitettsége [The political vulnerability of the pension system]. In: Kolosi, T. — Tóth, I. Gy. (eds): Társadalmi Riport 2008 [Social Report 2008]. Budapest: TÁRKI.

    Gál R. I. , '', in Társadalmi Riport 2008 [Social Report 2008] , (2008 ) -.

  • Haggard, S. — Kaufman, R. R. — Shugart, M. S. (2001): Politics, Institutions, and Macroeconomic Adjustment: Hungarian Fiscal Policy Making in Comparative Perspective. In: Kornai, J. — Haggard, S. — Kaufman, R. R. (eds): Reforming the State: Fiscal and Welfare Reform in Post-socialist Countries. Cambridge: Cambridge University Press.

    Shugart M. S. , '', in Reforming the State: Fiscal and Welfare Reform in Post-socialist Countries , (2001 ) -.

  • Hibbs, D. A. (1977): Political Parties and Macroeconomic Policy. The American Political Science Review 71(4): 1467–1487.

    Hibbs D. A. , 'Political Parties and Macroeconomic Policy ' (1977 ) 71 The American Political Science Review : 1467 -1487 .

    • Search Google Scholar

  • Hungarian Central Statistical Office (n.d.a): Social security, social welfare (1960-), http://www.ksh.hu/ docs/eng/xstadat/xstadat_long/h_fsp001.html, accessed 14 March 2014.

  • Hungarian Central Statistical Office (n.d.b): Lakáscélú hitelek (2001-) [Home-buying loans (2001-), http://www.ksh.hu/docs/hun/xstadat/xstadat_eves/i_zrh001.html , accessed 14 March 2014

  • IMF (1997a): Hungary: Selected Issues. Country Report No. 97/103. Washington: IMF.

    '', in Country Report No. 97/103 , (1997 ) -.

  • IMF (1997b): Hungary: Statistical Appendix. Country Report No. 97/104. Washington: IMF.

    '', in Country Report No. 97/104 , (1997 ) -.

  • IMF (2000): Hungary: Selected Issues and Statistical Appendix. Country Report No. 00/59. Washington: IMF.

    '', in Country Report No. 00/59 , (2000 ) -.

  • Kornai, J. (1996): Kiigazítás recesszió nélkül [Correction without recession]. Közgazdasági Szemle 43(7–8): 585–613.

    Kornai J. , 'Kiigazítás recesszió nélkül [Correction without recession] ' (1996 ) 43 Közgazdasági Szemle : 585 -613 .

    • Search Google Scholar

  • Lewis-Beck, M. S. (1988): Economics and Elections: The Major Western Democracies. Ann Arbor: University of Michigan Press.

    Lewis-Beck M. S. , '', in Economics and Elections: The Major Western Democracies , (1988 ) -.

  • McCallum, B. T. (1978): The Political Business Cycle: An Empirical Test. Southern Economic Journal 44(3): 504–515.

    McCallum B. T. , 'The Political Business Cycle: An Empirical Test ' (1978 ) 44 Southern Economic Journal : 504 -515 .

    • Search Google Scholar

  • Mink, M. — de Haan, J. (2006): Are there Political Budget Cycles in the Euro Area? European Union Politics 7(2): 191–211.

    Haan J. , 'Are there Political Budget Cycles in the Euro Area ' (2006 ) 7 European Union Politics : 191 -211 .

    • Search Google Scholar

  • Muraközy, L. (2008): Magyarország felemelkedése és hanyatlása [The rise and fall of Hungary]. Közgazdasági Szemle 55(February): 149–168.

    Muraközy L. , 'Magyarország felemelkedése és hanyatlása [The rise and fall of Hungary] ' (2008 ) 55 Közgazdasági Szemle : 149 -168 .

    • Search Google Scholar

  • National Bank of Hungary (2003): Quarterly Report on Inflation. February, Budapest: MNB.

    '', in Quarterly Report on Inflation , (2003 ) -.

  • Nordhaus, W. D. (1975): The Political Business Cycle. The Review of Economic Studies 42(2): 169–190.

    Nordhaus W. D. , 'The Political Business Cycle ' (1975 ) 42 The Review of Economic Studies : 169 -190 .

    • Search Google Scholar

  • OECD (1997): OECD Economic Surveys, Hungary. Paris: OECD.

    '', in OECD Economic Surveys , (1997 ) -.

  • OECD (2000): OECD Economic Surveys, Hungary. Paris: OECD.

    '', in OECD Economic Surveys , (2000 ) -.

  • OECD (2002): OECD Economic Surveys, Hungary. Paris: OECD.

    '', in OECD Economic Surveys , (2002 ) -.

  • OECD (2004): OECD Economic Surveys, Hungary. Paris: OECD.

    '', in OECD Economic Surveys , (2004 ) -.

  • OECD (2005a): OECD Economic Surveys, Hungary. Paris: OECD.

    '', in OECD Economic Surveys , (2005 ) -.

  • OECD (2005b): Pensions at a Glance. Paris: OECD.

    '', in Pensions at a Glance , (2005 ) -.

  • OECD (2007): OECD Economic Surveys, Hungary. Paris: OECD.

    '', in OECD Economic Surveys , (2007 ) -.

  • Persson, T. — Tabellini, G. (1990): Macroeconomic Policy, Credibility and Politics. London: Harwood Economic Publisher.

    Tabellini G. , '', in Macroeconomic Policy, Credibility and Politics , (1990 ) -.

  • Persson, T. — Tabellini, G. (2003): Do Electoral Cycles Differ Across Political Systems? Innocenzo Gasparini Institute for Economic Research Working Paper No. 232.

    Tabellini G. , '', in Innocenzo Gasparini Institute for Economic Research Working Paper No. 232 , (2003 ) -.

  • Rogoff, K. (1990): Equilibrium Political Budget Cycles. The American Economic Review 80(1): 21–36.

    Rogoff K. , 'Equilibrium Political Budget Cycles ' (1990 ) 80 The American Economic Review : 21 -36 .

    • Search Google Scholar

  • Rogoff, K. — Sibert, A (1988): Elections and Macroeconomic Policy Cycles. NBER Working Paper No. 1838.

    Sibert A. , '', in NBER Working Paper No. 1838 , (1988 ) -.

  • Schuknecht, L. (2000): Fiscal Policy Cycles and Public Expenditure in Developing Countries. Public Choice 102(1–2): 115–130.

    Schuknecht L. , 'Fiscal Policy Cycles and Public Expenditure in Developing Countries ' (2000 ) 102 Public Choice : 115 -130 .

    • Search Google Scholar

  • Shi, M. — Svensson, J. (2002a): Conditional Political Budget Cycles. CEPR Discussion paper No. 3352.

    Svensson J. , '', in CEPR Discussion paper No. 3352 , (2002 ) -.

  • Shi, M. — Svensson, J. (2002b): Political Budget Cycles in Developed and Developing Countries. Institute for International Economic Studies, Stockholm University. Accessed at: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.202.8595&rep=rep1&type=pdf

    Svensson J. , '', in Political Budget Cycles in Developed and Developing Countries , (2002 ) -.

  • Shi, M. — Svensson, J. (2003): Political Budget Cycles: A Review of Recent Developments. Nordic Journal of Political Economy 29: 67–76.

    Svensson J. , 'Political Budget Cycles: A Review of Recent Developments ' (2003 ) 29 Nordic Journal of Political Economy : 67 -76 .

    • Search Google Scholar

  • Tufte, E. (1978): Political Control of the Economy. Princeton, NJ: Princeton University Press.

    Tufte E. , '', in Political Control of the Economy , (1978 ) -.
  • Collapse
  • Expand
Cover Society and Economy
Society and Economy
Print ISSN:
1588-9726
Online ISSN:
1588-970X

Editor-in-chief: Balázs SZENT-IVÁNYI

Co-Editors:

  • Péter MARTON (Corvinus University, Budapest)
  • István KÓNYA (Corvinus University, Budapest)
  • László SAJTOS (The University of Auckland)
  • Gábor VIRÁG (University of Toronto)

Associate Editors:

  • Tamás BOKOR (Corvinus University, Budapest)
  • Sándor BOZÓKI (Corvinus University Budapest)
  • Bronwyn HOWELL (Victoria University of Wellington)
  • Hintea CALIN (Babeş-Bolyai University)
  • Christian EWERHART (University of Zürich)
  • Clemens PUPPE (Karlsruhe Institute of Technology)
  • Zsolt DARVAS (Bruegel)
  • Szabina FODOR (Corvinus University Budapest)
  • Sándor GALLAI (Corvinus University Budapest)
  • László GULÁCSI (Óbuda University)
  • Dóra GYŐRFFY (Corvinus University Budapest)
  • György HAJNAL (Corvinus University Budapest)
  • Krisztina KOLOS (Corvinus University Budapest)
  • Alexandra KÖVES (Corvinus University Budapest)
  • Lacina LUBOR (Mendel University in Brno)
  • Péter MEDVEGYEV (Corvinus University Budapest)
  • Miroslava RAJČÁNIOVÁ (Slovak University of Agriculture)
  • Ariel MITEV (Corvinus University Budapest)
  • Éva PERPÉK (Corvinus University Budapest)
  • Petrus H. POTGIETER (University of South Africa)
  • Sergei IZMALKOV (MIT Economics)
  • Anita SZŰCS (Corvinus University Budapest)
  • László TRAUTMANN (Corvinus University Budapest)
  • Trenton G. SMITH (University of Otago)
  • György WALTER (Corvinus University Budapest)
  • Zoltán CSEDŐ (Corvinus University Budapest)
  • Zoltán LŐRINCZI (Ministry of Human Capacities)

Society and Economy
Institute: Corvinus University of Budapest
Address: Fővám tér 8. H-1093 Budapest, Hungary
Phone: (36 1) 482 5406
E-mail: balazs.szentivanyi@uni-corvinus.hu

Indexing and Abstracting Services:

  • CABELLS Journalytics
  • DOAJ
  • International Bibliographies IBZ and IBR
  • International Political Science Abstracts
  • JSTOR
  • SCOPUS
  • RePEc
  • Referativnyi Zhurnal

 

2023  
Scopus  
CiteScore 1.5
CiteScore rank Q2 (Sociology and Political Science)
SNIP 0.496
Scimago  
SJR index 0.243
SJR Q rank Q3

Society and Economy
Publication Model Gold Open Access
Submission Fee none
Article Processing Charge 900 EUR/article with enough waivers
Regional discounts on country of the funding agency World Bank Lower-middle-income economies: 50%
World Bank Low-income economies: 100%
Further Discounts Sufficient number of full waiver available. Editorial Board / Advisory Board members: 50%
Corresponding authors, affiliated to an EISZ member institution subscribing to the journal package of Akadémiai Kiadó: 100%
Subscription Information Gold Open Access

Society and Economy
Language English
Size B5
Year of
Foundation		 1972
Volumes
per Year		 1
Issues
per Year		 4
Founder Budapesti Corvinus Egyetem
Founder's
Address		 H-1093 Budapest, Hungary Fővám tér 8.
Publisher Akadémiai Kiadó
Publisher's
Address		 H-1117 Budapest, Hungary 1516 Budapest, PO Box 245.
Responsible
Publisher		 Chief Executive Officer, Akadémiai Kiadó
ISSN 1588-9726 (Print)
ISSN 1588-970X (Online)

Monthly Content Usage

Abstract Views Full Text Views PDF Downloads
Apr 2024 67 0 0
May 2024 5 0 0
Jun 2024 14 0 0
Jul 2024 6 0 0
Aug 2024 17 0 0
Sep 2024 55 0 0
Oct 2024 59 0 0