Looked at whether opportunistic and partisan business cycles influence fiscal policy in 28 developing countries when controlling for de facto exchange rate regimes and capital mobility. Several issues were investigated: 1) opportunistic business cycles, whether elections cause the governments budget balance (taxes minus spending) to experience fiscal expansion (lower taxes and higher spending) in order to stimulate the economy; 2) partisan business cycles, whether left-wing parties engage in more fiscal expansion; 3) whether growing capital mobility (the ability of financial capital to move across borders) will encourage or inhibit a government's ability to engage in fiscal expansion with an impending election or left-wing party; and 4) whether the exchange rate regime (the rules for determining the exchange rate) is a mitigating factor.
