Fiscal forecast manipulations and electoral results: evidence from Portuguese municipalities

• Autor(a) principal: Boukari, Mamadou
• Data de Publicação: 2020
• Outros Autores: Veiga, Francisco José
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: https://hdl.handle.net/1822/67569
• topic: Budget Forecast Errors; Elections; Municipalities; Portugal

This paper aims to evaluate the impact of budget forecast manipulations on election results using a sample that covers all 308 Portuguese municipalities over the period running from 1998 to 2017. The results reveal that incumbent mayors overestimate revenues and expenditures. Overstating the budget more on the revenue side, they end up with a deficit. We check whether this opportunistic behavior is electorally beneficial. The results provide little or no evidence that election-year manipulations of revenue forecasts affect the vote shares of the parties of the incumbent mayors. On the other hand, the opportunistic management of total and capital expenditure forecasts pays off, which is consistent with previous results for Portugal indicating that increased total and, mainly, capital expenditures lead to higher vote shares.