Political Determinants of Budgetary Transparency

I examine the pattern induced by the electoral cycle on budgetary transparency and tricks as the act of rational elected officials who maximize their chances of re-election subject to various economic and institutional constraints. Essay 1 provides institutional background and reviews the literature. In essay 2, I investigate this pattern at the US state level using a panel of 47 states spanning a period of 19 years (2002-2020). The fundamental hypothesis is that budgetary transparency varies with the electoral cycle and diminishes near elections as more tricks are used closer to elections. I confirm the validity of my dependent variables (i.e., measures of budgetary transparency and budget tricks) by comparing them with data assembled by teams of researchers for the Volcker Alliance. My econometric analysis provides some evidence that budgetary transparency diminishes near elections but the negative association of budgetary transparency with election year is statistically insignificant. Essay 3 examines analogous hypotheses using a panel of 30 cities spanning a period of 11 years (2010-2020). This exercise does find statically significant evidence that budget transparency varies over the election cycle.