Party Ideology and Public Spending: Evidence from 16 Post-Socialist Countries

Author explores the impact of ideological orientation of ruling parties on levels of public spending in former socialist countries of Central and Eastern Europe. With the breakdown of socialism in Europe, the paradigm of omnipresent state providing widespread access to various aspects of welfare, from heavily subsidized education and healthcare, to housing and guaranteed employment, came to an abrupt end. The whole socialist conception of society changed rapidly, with the state withdrawing from the economy. Moreover, inflated welfare budgets were severely reduced. Simultaneously, economic transition run parallel with political change: formation of multiparty systems and positioning of newly established parties along the ideological spectrum. Most common denominator of these new party systems, especially when comes to socioeconomic issues, is the left-right cleavage, similar to Western democracies. The question posed is whether these newly formed parties tend to exercise their proclaimed ideological stance when governing, especially in relation with public spending as a clear indicator of conflicting logic of left and right when comes to socioeconomic outcomes. Namely, the parties on the left are advocating for elimination of social inequalities through state intervention (with public spending being the indicator of intervention), while the right is promoting deregulation, reflected in spending cuts. The correlation and moreover, an impact of party ideology on public spending is proved and well established in a number of research conducted in Western democracies (Cameron, 1978; Hicks & Swank, 1984; Murell, 1985; Berry & Lowery, 1987; Blais, Blake & Dion, 1993; Pickering & Rockey, 2011 – to name just a few). On the other hand, studies concerning the former socialist countries are scarce and unsystematic. This paper aims to provide the new evidence with data from 16 post-socialist, democratic countries of Central and Eastern Europe (Poland, Hungary, Czech Republic, Slovakia, Estonia, Lithuania, Latvia, Romania, Bulgaria, Moldova, Albania, Slovenia, Croatia, Macedonia, Montenegro, and Serbia), for the whole period since the fall of the Berlin Wall. Main hypothesis of the research assumes the ideology of governing parties having statistically the most significant impact on public spending in former socialist countries, with positive effect of the left, and negative effect of the right parties on spending levels. In order to confirm that premise, the research will be designed in order to consider the effect of other potential predictors, along with party ideology as presumably the main explanatory variable. These alternative explanations will be tested within four groups of variables: economic (unemployment rate, GDP growth, arrangement with IMF), political (electoral cycles, electoral system, coalition size, type of government, impact of upper house), demographic (share of population under 15 and over 65 years of age), and contextual factors (European Union integration status, conflict heritage, level of openness, level of transformation). Main explanatory variable, party ideology, will be retrieved from an Expert survey on party ideology in former socialist countries, which the author conducted in mid-2017, on a multinational sample of 273 experts in party systems of countries in question. Data will be tested quantitatively, through multivariate statistical analysis.