Aidt, T. S., Asatryan, Z., Badalyan, L. and Heinemann, F.

Vote Buying or (Political) Business (Cycles) as Usual?

Review of Economics and Statistics

Vol. 102 no. 3 pp. 409-425 (2020)

Abstract: We report robust evidence of a new short-run monetary election cycle: the monthly growth rate of the money supply (M1) around elections is higher than in other months in a sample of low and middle income countries. We hypothesize this is related to systemic vote buying. Consistent with this, we find no cycle in authoritarian countries and countries with strong political institutions and a pronounced cycle in elections where international election monitors reported vote buying or in close elections. Using survey data on daily consumer expenditure, we show that within household consumption of food increases in the days before elections.

Keywords: Political business cycles, vote buying, monetary economics

JEL Codes: D72, E51, O10

Author links: Toke Aidt

Publisher's Link: https://doi.org/10.1162/rest_a_00820