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Existing empirical literature on political business cycles focused primarily on developed economies before it began considering a basket of both developed and developing economies. This study seeks to expand the existing literature by pursuing two objectives using Brazil, Russia, India, China and South Africa (BRICS) as locations of the study. The first objective is to examine the presence (lack thereof) of political business cycles in the BRICS trading block for the period 1994 to 2014. The second objective of this study is to examine the effect that political business cycles (if present) have on the sovereign credit ratings that the BRICS countries receive from credit rating agencies. Credit rating agencies make use of a combination of political, social and economic factors to determine the ratings assigned to various countries. The credit ratings assigned to countries by these agencies play an important role to international lenders as they use these ratings to make decisions on the interest rates they charge to different sovereigns. Based on the first objective, the findings from this study show that there is weak evidence of electorally timed interventions in BRICS economies over the period of 1994 to 2014. These findings are inconsistent with the predictions of political business cycle theory which suggests that incumbent politicians take advantage of the information gap between them and voters by implementing economic changes closer to an election year in order to exude competence and to increase their chances of reelection. However, further analysis based on the second objective shows that elections in BRICS countries are not viewed negatively by credit rating agencies. Hence, unlike in other developing countries, the BRICS countries are not likely to be downgraded during or after election years. Consequent to these findings, this study supports the notion that the government’s influence on the fiscal and monetary policy variables across BRICS is not concentrated nor overly exerted around election periods and that the BRICS countries’ institutions are regarded by rating agencies as independent and up to relevant international standards.

This paper tests whether politically connected firms in Putin’s Russia are a channel for the political business cycle. Given the widespread corruption and crony capitalism that exists in Russia, it is likely that federal and regional politicians may need to buy the electoral support of powerful, connected firms in order to win elections. Using panel data of approximately 60,000 Russian firms comprising an estimated 62 percent of GDP per year from 2003-2011, I find that federally connected firms are significantly more productive in federal election years. If these cycles in firm productivity are caused by electoral favors from politicians, this not only further corrupts Russia’s political landscape, but it also may induce powerful firms to engage in costly political bidding wars for these connections, thus inhibiting their productivity and the overall productivity of the Russian economy.

O objetivo deste trabalho é analisar a influência do calendário eleitoral sobre a condução da política monetária no Brasil. Através de uma regra de Taylor expandida com variáveis eleitorais, investigamos se o Banco Central atuou com objetivos políticos nas eleições do período pós-flutuação cambial. Os resultados obtidos mostram não haver evidências de que a taxa Selic tenha sido manipulada com fins eleitoreiros, o que está em linha com a evidência internacional atestando ausência de ciclos políticos na política monetária. Este achado acaba reforçando também a percepção de que o Banco Central do Brasil tem desfrutado de verdadeira independência de instrumentos nos últimos anos. / This paper investigates whether the management of monetary policy in Brazil has been affected by the electoral cycle. Based on the estimation of a Taylor Rule expanded with political variables, it is possible to check if the Central Bank\'s decisions were at least partially guided by electoral considerations in the period following the abandonment of the pegged regime. The results suggest that the Selic rate was not influenced by elections, which is in line with international evidence showing the absence of monetary policy political cycles in a cross section of countries. Further, this finding reinforces the perception that the Brazilian Central Bank has enjoyed a true instrument-independent status in the recent period.

This article will verify whether the central banks create political business cycles or not. To refer to the Opportunistic Model operated by Leetouwer and Maier (2002), this research will expand the acquisition time of data till the fourth season of 2008, and added Korea¡BMalaysia and Taiwan into the model. In this article, the independent variables will be the rates announced by central banks of these ten countries. The dependent variables will be the date of president/parliamentary elections and the independence of central bank to verify before the elections whether will the central banks create political business cycles through setting lower rate in monetary policy are pressured by rules or not. The empirical results show that: 1.The assumption of Central banks will use interest rates to create a political business cycle does not hold. This complements with Leetouwer and Maier¡¦s results studied in 2002, the interest rate cannot be used as a tool to create political business cycle. 2. The higher independence of central bank, the interest rate introduced by central bank will be lower, and as well as the inflation rate.

Generally speaking, business cycle could be discussed as a short-term fluctuation of business cycle and long-term economic growth. In this research, we will confer what impact factors might have affected the business cycle of correlations (BCCs) across countries in a period of short time. Many empirical analysis have pointed out the temporary factors to the business cycle mainly come from the transferred factors of economic aspect. This is called ¡§Transmission Mechanisms.¡¨ What is ¡§Transmission Mechanisms?¡¨ Economists often try to substitute it in good markets, financial markets, and the coordination of monetary policies. However, in this duration of the empirical analysis, using only these proxy variables to explain BCCs between two countries seems too limited. According to this situation, we believe if the BCCs can be explained by using proxy factors of non-economic variable, the result can be utilized by making up the defect. We attempt to find new factors in political approach and combine with the ¡§Transmission Mechanisms¡¨ that we have introduced earlier. After that, we expect to comprehend the BCCs among G7 countries from the inputs of the two completed different variables. To analyze further economic implication in our research, five conclusions have been summarized below: Firstly, increasing bilateral trade has significantly provided positive effect to BCCs among G7 countries from 1980 to 2002. Because the empirical result of Single Country is insignificant, we then use a two-stage method. First, we estimate ¡§Trade¡¨ from endogenous variable to exogenous one. Secondly, we use Panel method to expand its matrix. Finally, we improve the empirical estimators of insignificant statistics before. In other words, the important variables of the correlation of bilateral trade are whether or not the two countries speak the same language; the border problem, and the distance between the two are the same, etc. So, when we talk about the relations between BCCs and good and service markets, we must consider these exogenous factors. Eventually, we will receive more detailed results. Secondly, although to trade in financial markets can increase the BCCs between two countries, the statistic report is insignificant -0.0019 (0.0012). About this empirical result, we can obtain reasonable explanations from the researches (for instance: Imbs, 2004 or Kose et al, 2003), they point out that financial markets are bound excessively by globalization. Therefore, this will aggravatingly make each country to focus on its specialization. Finally, this situation will make the BCCs getting collapsed among these countries. This also explains that the specialization among these countries will reduce the positive effect from the BBCs to financial markets. Thirdly, in this empirical research of Single-Country, we use three proxy estimators of economics to substitute common properties of the monetary policy. At this point, there are no identical correlations of corresponding among other countries except some significantly negative trends shown to the member countries of European Union. According to this situation, we believe it may be the consequence to all the member countries under some ERM restrictions, which is Treaty of Maastricht. Also, because of the rules form this treaty, the monetary policies are getting to be accordant, and the BCCs among the countries will soon appear in obviously positive trend. Fourthly, in the model, the difference of the inflation rate between two countries is not significant with BCCs; therefore, an identical correlation is hardly shown. Moreover, the coefficient symbol is not in our expecting direction, so we think maybe some policies are neglected to the influence of this variable. After all these, we believe if we can control some relative policy effect to inflation rate when discussing the relationship between this variable and the BCCs, we should be able to find out the real effect of this substitutive variable to BCCs Lastly, in the research, the statistics effect of the party variables and business cycle of correlations are very significant. This also indicates the political factor will play an important role for many sources of the fluctuation tread of BCCs. In other words, when we discuss the issue of BCCs if miss the contribution of political factors to the BCCs. Then, this might cause the omitted variable biased, and finally cause the whole computation become inefficient. In addition, we can have further discussion by an input of a factor: to conserve the joint benefit of all the member countries in an economic organization, these countries need to be ruled by the same ideal political party. Otherwise, the institute will never reach its essential result. Combining all the conclusions we have shown above, we can find out the BCCs among G7 countries from 1980-2002. Besides the influence of the ¡§Transmission Mechanisms,¡¨ the result will be varied by the political factors. In conclusion, we need to consider the contribution of the political party variables to the BCCs when talking about this issue, therefore; the original theoretical model can be more persuasive. According to a statistics of IMF, the BCCs among those industrial countries are falling little by little in recent years. Therefore, consolidating trade cooperation is essential for what we believe to improve the BCCs among G7. At the same time, pass through a strong integrate monetary policy can move forward all the incumbent parties from all the countries to agree among themselves, and even reach more substantial effect. From the example like this, we might find evidence from BCCs issues by discussing the integration process in European Monetary Union.

Authoritative period, party-state are integrative relation, the government has enough resources to control the society, political personages do not need to depend on the entrepreneur under the control of party-state. With the gradual transitions of ' the political structure ' and ' economic structure ', the Kuomintang government must transfer to obtain legitimacy of dominion by electing and economic development, the opposition party also can develop under this kind of environment, so government-business relations has changed. In brief, research of this thesis is to study government-business relations of Taiwan whether has the new appearance behind the transition of ruling Parties and under the changes of the Cross-Straits relations. Research of this thesis is to analysis concrete change of government-business relations under the different presidents head the administration' period. Finding in this thesis that the policy government-business relations of Taiwan appear type of ' big government and small enterprise ' in authoritative period (before 1987), and government have high independence to control the society in one party authoritarian, among the government and enterprise build and construct out an ' unequal government-business relations '. After martial law(1987- 2000), government-business relations appear type of' middle government and small enterprise ', enterprises no longer receive government's comprehensive control under the challenge of the opposition, government-business relations is changed into a kind of ' unequal ally's relation '. government-business relations appear type of 'middle government middle enterprise ' after transition of ruling parties(2000- 2004),the politician helps the entrepreneur to try or influence the policy, but the entrepreneur offers campaign financing for politician , therefore t government-business relations is turned into ' the relation of the equality and mutual benefit '. With the promotion of the trading tie between Taiwan and China, ' the Cross-Straits relations 'become the important key influencing government-business relations of Taiwan to change gradually. In the theory meaning, this means capitalist physique of Taiwan, already from the bureaucracy capitalist and leading systems of authoritative times make the transition for the system with leading folk capital gradually, the independence of state apparatus relative to folk capital of is reducing day by day, and the influence power of the folk capital to the decision-making process of state apparatus rises day by day. Meanwhile , the Cross-Straits relations become the enough factor influencing government-business relations inside Taiwan, therefore Chinese Government make state apparatus pass the operation of trading ties of the Cross-Straits gradually to influence government-business relations of Taiwan and decision-making process of the g state apparatus of Taiwan inside Taiwan, even weaken the state apparatus independence of Taiwan, thus state apparatus of Taiwan face the double crisis coming from native folk capital and Chinese state apparatus .

This dissertation includes three different topics concerning the political business cycles in developed countries. In the first section, we use annual data for 48 states from 1951 to 2004 by the method of instrumental variables estimation. We find that the partisan theory created in statewide via two channels including the partisanship effect which include the interactive relationships between president and governors or among governors, and the partisan ideology including the policy preferences are both potential shocks to a real business cycle. Next, we investigate the theory of partisan cycles using panel cointegration and fully modified OLS techniques based on the same data as earlier. We propose the long-run co-movement and the causal relationships between partisan target and cycle variables. Meanwhile, the panel error correction model shows evidence of long-run unidirectional causality running from partisan variables to target variables. This shows that, in the long run, statewide economic performance must be directly based on politicians¡¦ concerns for policies and outcomes, as well as on exhibiting strong ideological differences in those preferences across parties in the United States. Overall, we contribute an essential reference to the voters. Finally, a new government popularity index (GPI) is constructed and using variables that include real GDP, industrial production, the unemployment rate and the inflation rate as measures of bilateral activity correlation beginning in 1981Q1 and ending in 2005Q4 for 15 European countries. The estimation procedure is developed by rolling the correlation of bilateral activity every twenty quarters and running it on partisan variables, namely, as a kind of government popularity index and the difference between partisan ideologies combined with traditional bilateral trade intensity variables. Overall, a strong and striking empirical finding is uncovered: countries with closer popular governments, incumbent ideologies as well as trade links, tend to have more closely correlated business cycles.

O objetivo deste trabalho é analisar a influência do calendário eleitoral sobre a condução da política monetária no Brasil. Através de uma regra de Taylor expandida com variáveis eleitorais, investigamos se o Banco Central atuou com objetivos políticos nas eleições do período pós-flutuação cambial. Os resultados obtidos mostram não haver evidências de que a taxa Selic tenha sido manipulada com fins eleitoreiros, o que está em linha com a evidência internacional atestando ausência de ciclos políticos na política monetária. Este achado acaba reforçando também a percepção de que o Banco Central do Brasil tem desfrutado de verdadeira independência de instrumentos nos últimos anos. / This paper investigates whether the management of monetary policy in Brazil has been affected by the electoral cycle. Based on the estimation of a Taylor Rule expanded with political variables, it is possible to check if the Central Bank\'s decisions were at least partially guided by electoral considerations in the period following the abandonment of the pegged regime. The results suggest that the Selic rate was not influenced by elections, which is in line with international evidence showing the absence of monetary policy political cycles in a cross section of countries. Further, this finding reinforces the perception that the Brazilian Central Bank has enjoyed a true instrument-independent status in the recent period.

This thesis seeks to analyze the phenomenon of political business cycle (PBC) in the Czech Republic. It follows up the efforts of previous authors to determine the existence and subsequent character of the PBC in the country. Based upon the related works, it summarizes the current situation. However, unlike the previous analyses, this work concerns the monetary side of the economy. To be more precise, it examines the role of the Czech National Bank (CNB) within the process of political business cycle. It questions the level of independency of the CNB and poses a question whether the institution might actively participate in the creation of PBC. The following empirical analysis reveals that the CNB actively reduces the monetary base level in the economy within the pre-election period. It might signal its tendency to mitigate opportunistic behavior of the government.