Recent research has demonstrated that while government expenditures are countercyclical in most industrialized countries, they tend to be procyclical in developing countries. We develop a dynamic political-economy model to explain this phenomenon. Simulations of the model allow us to...

Several empirical studies have found that government expenditures are procyclical in developing countries, unlike the countercyclical expenditures observed in high- income countries. We develop a dynamic political economy model to explain this phenomenon. In the model, governments provide public...