Burning the Preelection Oil - Environmental Political Business Cycles in Vietnam
P11-5
Presented by: Franziska Quoß
The theory of political business cycles (PBC) conjectures that office-seeking politicians have incentives to manipulate monetary and fiscal policy which leads to expansionary macroeconomic policies to spur real economic improvement close to elections. In this study, we examine the potential consequences of such behavior on the natural environment. Focusing on Vietnam, an authoritarian regime, we argue and show that even within such a context politicians seek to demonstrate high economic growth prior to elections in order to signal competence to political leaders (and voters), which directly affects the environment. Our empirical analysis is based on an original dataset of constituency-level air pollution from satellite-based aerosol optical depth (AOD) measurements which we match with data of individual candidates of the Vietnam National Assembly (VNA) during three electoral periods spanning the years 2007 to 2016. Leveraging on this wealth of fine-grained data, we demonstrate that air pollution fluctuates along the electoral cycle with the highest pollution measured around elections, thus indicating the presence of an environmental political business cycle (EPBC). Using a spatial error model, this paper presents an innovative way of furthering the understanding of the nexus between electoral cycles and environmental pollution. We add to the literature on (environmental) political business cycles and the role of elections in nondemocratic regimes by applying innovative measurement techniques based on satellite imagery.