Election-related cycles in publicly supplied goods in Albania.

Abstract

It is widely perceived by public opinion that incumbents try to improve the economic situation before elections to impress voters, typically through fiscal and/ or monetary expansion policies, creating in this way Political Business Cycles (PBC). However, governments in transition countries may use additional instruments, up to now not covered by the PBC literature. Throughout the transition, the electricity supply has not been regular in Albania, reflected in systematic daily interruptions to supply for households and business throughout the country, seriously affecting their wellbeing. Thus, it is rational that the incumbent commits to improving electricity supply to please the voters before elections, using its monopoly position in the production and supply of electricity. The results confirm our hypotheses that before elections, the supply of electricity increases significantly above usual levels, followed by a contraction after elections.