Elections, electoral pressure, and macroeconomic policy : the political economy of elections in Korea and Taiwan

다국어 초록 (Multilingual Abstract)

This dissertation study aims at exploring the relationship between elections and macroeconomic policies in Korea and Taiwan. This research performs two tasks. It refines the political business cycle (PBC) model and challenges the bureaucratic dominance theory.
To refine the PBC model, I review previous empirical and theoretical debates on the relevancy of the PBC model and relax the 'hidden assumption' regarding electoral pressures on an incumbent government's incentive to manipulate economic policies before elections, so as to get votes. From these debates, I derive my first hypothesis: given such factors as the fixed timing of elections, incumbent governments' control of fiscal and monetary institutions, and manageable economic conditions, incumbent governments will attempt to pursue macroeconomic manipulation before elections. I then relax the hidden assumption regarding the extent of electoral pressure on incumbent governments' incentives to manipulate macroeconomic policies. This process leads me to deduce four hypotheses, centering on such variables as government popularity, electoral rules, regime type, and the closeness to election dates. The expectation is that the degree of popularity, the degree of electoral distortion by electoral rules, regime type, and the closeness to election dates, all affect the extent to which incumbent governments manipulate fiscal and monetary policies.
By detecting electoral cycles in Korean and Taiwanese fiscal and monetary policy, I offer a challenge to the conventional wisdom, the bureaucratic dominance theory that disregards the roles of political actors and elections.
The time-series regression analyses of this dissertation reveal that, in the area of monetary policy, Taiwanese governments do not perform policy manipulation in every election. Rather, Taiwanese governments tend to manipulate policies, corresponding to their government popularity. In the area of fiscal policy, Korean governments have carried out different degrees of policy manipulation, depending on their popularity. In addition, democratic Korean governments have been under incremental electoral pressure. Taiwanese governments have manipulated their fiscal policies prior to every election.

목차 (Table of Contents)

• Chapter I. Introduction = 1
• 1.1. Research Question = 1
• 1.2. Plan of the Study = 5
• Chapter II. Theoretical Discussion = 7
• 2.1. Conventional Wisdom:The Bureaucratic Dominance Theory = 7
• 2.2. An Alternative Explanation:The Political Business Cycle Model = 13
• Chapter III. Design of the Research = 23
• 3.1.Hypotheses = 23
• 3.1.1.Hypothesis 1:Elections and Economic Policy Manipulation = 23
• 3.1.2. Hypothesis 2:Electoral Pressure and Economic Policy Manipulation = 27
• 3.2. Measurement of Dependent and Independent Variables = 35
• 3.2.1.Dependent Variable = 35
• 3.2.2. Independent Variables = 38
• 3.3. Regression Models = 47
• 3.4. Case Selection = 52
• Chapter IV. Electoral Rules, and Electoral Systems, and Elections:Description = 61
• 4.1. Electoral Rules and Systems = 62
• 4.1.1. Korea = 62
• 4.1.2. Taiwan = 73
• 4.2. Elections and Political Parties = 82
• 4.2.1. Korea = 82
• 4.2.2. Taiwan = 102
• Chapter V. Elections, Electoral Pressures, and Fiscal Policy:Analysis 1 = 119
• 5.1. Budgetary Process and Tax System = 120
• 5.1.1. Korea = 120
• 5.1.2. Taiwan = 130
• 5.2. Regression Analysis:Regression Models and Interpretations = 138
• 5.2.1. Regression Models = 138
• 5.2.2. Regression Results and Interpretations = 141
• Chapter VI. Elections, Electoral Pressures, and Monetary Policy:Analysis 2 = 165
• 6.1. Monetary Authorities and Institutions = 166
• 6.1.1. Korea = 166
• 6.1.2. Taiwan = 173
• 6.2. Regression Analysis:Regression Models and Interpretations = 182
• 6.2.1.Regression Models = 182
• 6.2.2. Regression Results and Interpretations = 184
• Chapter VII. Conclusion = 199
• Bibliography = 210