ABSTRACT
There is a large body of political and economic research on the factors playing a role in the electoral choices of voters. There is a measure of consensus about the idea that economic variables are important for the popularity of governments (see, for a survey of the literature, Nannestad and Paldam, 1994). Political business cycle models usually neglect voting behaviour and just assume that it is the economy that determines the electoral choices of voters: 'it's the economy, stupid!' This assumption leads to the observation that politicians wish the economy to look good around election time. Therefore, as was noted in chapter one, the timing of elections may well be affecting economic policies. It is a persuasive argument that governments would want to try to manipulate the economy to enhance electoral chances at the next general election.
