№ 9/2019

Fìnansi Ukr. 2019 (9): 7–26https://doi.org/10.33763/finukr2019.09.007

BUDGET POLICY

SOKOLOVSKA Alla ¹

¹SESE “The Academy of Financial Management”
OrcID ID : https://orcid.org/0000-0002-1022-8215

Political fiscal cycle: conceptual fundamentals and Ukrainian realities

The aim of the research is to test the hypothesis of the impact of the political cycle on tax policy in Ukraine and to expand the understanding of the budget policy instruments used in the policy cycle. The article reviews publications of foreign and domestic scientists on the problem of political business and fiscal cycles, which allowed to identify differences in their coverage of such issues as: fiscal instruments used by politicians to influence on voters; countries where a statistically confirmed (significant) budget cycle is observed; factors that affect on cycle intensity. Using information on changes in tax legislation and indicators of revenues, expenditures and deficits of the Consolidated budget of Ukraine in 1997-2018, the impact of the policy cycle on tax and budgetary policy in Ukraine was investigated. The study confirmed the use of tax and budgetary policy instruments in the political cycle in Ukraine, such as decreasing rates of the main taxes before or during elections, tax stimulation of selected target groups of votes – tax incentives for certain sectors of the economy and taxpayer groups, write-offs and restructuring of tax debt before the budget and state social funds, increase of state expenditures, incl. expenditures on social protection of the population, as well as changing the proportion of current and capital expenditures in favor of current ones.

Keywords:political business cycle, political fiscal (budget) cycle, rational opportunistic model, moral risk model

JEL: D72, E32, H39

Sokolovska A. . Political fiscal cycle: conceptual fundamentals and Ukrainian realities / A. . Sokolovska // Фінанси України. - 2019. - № 9. - C. 7-26.

Article original in Ukrainian (pp. 7 - 26)

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