Election spending

There are many ways of looking at election spending. Among these are the moral issue, the legal angle, and the economic view.

In today’s column I will look at the latter. Is election spending good or bad for the economy?

My view is that it is good. Why? It increases money in circulation, including dollars from abroad.

It should not come as a surprise if dollar remittances continue to increase until May even if, after December, it normally tapers off.

When money is released in the course of the campaign, this increases consumer spending for at least a few months. The increase in the demand for goods and services has an upward effect on economic production as more products are manufactured and sold.

This effect is intense in rural areas since it increases the sale of agricultural food products.

If this is accompanied by increased government spending on social services and infrastructure, then this too will have an upward effect on economic growth.

The twin effect of increased consumer and government spending could take the place of the expected slowdown in private investments as business waits for the results of the elections and the policies that will be shaped by the newly elected officials.

From an economic standpoint, the increase in spending during an election will have a positive effect on the economy.

That initial effect can be bolstered if the officials who will be elected can implement projects and policies that will create employment and increase income.