Leadership

Do Leaders Affect Government Spending Priorities?

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Executive Summary

Since a key function of competitive elections is to allow voters to express their policy preferences, one might take it for granted that when leadership changes, policy change follows. Using a dataset the authors created on the composition of central government expenditures in a panel of 71 democracies over 1972-2003, they test whether changes in leadership induce significant changes in spending composition, as well as looking at the effect of other political and economic variables. They find that the replacement of a leader tends to have no significant effect on expenditure composition in the short-run. This remains true after controlling for a host of political and economic variables.

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