When left is right: Party ideology and policy in post-communist Europe

According to the classic partisan theory of spending, leftist parties are expected to increase government spending, and rightist parties are expected to decrease it. We argue that this relationship does not hold in post-Communist countries, where in the context of dual transition to democracy and to a market economy, leftist parties have had stronger incentives and better opportunities to enact tighter budgets, whereas rightist parties were compelled to spend more in order to alleviate economic hardships. We illustrate this theoretical argument with case studies from Hungary and Poland. We then test and find support for our theory by considering the influence of cabinet ideology on total, health, and education spending in thirteen post-Communist democracies from 1989 to 2004. We explore various alternative explanations and provide further narratives to support our causal argument.