Elections and government deficit spending: Evidence from Italian regions

This chapter provides new evidence on the existence of a political budget cycle at the intermediate governance level. The empirical analysis is conducted on a panel dataset of the Italian regions over the period 2000–2016. Regional primary deficits are found to be significantly higher in the last year of office and in the election year with respect to the other years of office. Results are robust across the different methods and specification considered, and do not vary even if we restrict the sample time span or distinguish between regional statutes.