International Scrutiny and Pre-Electoral Fiscal Manipulation in Developing Countries Susan D. Hyde Yale University Angela O’Mahony University of British Columbia Pre-electoral fiscal manipulation—spending more or taxing less prior to an election—is an important tool that governments possess to enhance their chances for reelection. Existing explanations of pre-electoral fiscal manipulation focus primarily on domestic characteristics. We extend this line of inquiry by examining international influences on governments’ decisions to engage in pre-electoral fiscal manipulation. We find that international scrutiny of the economy and international scrutiny of elections affect pre-electoral fiscal manipulation in cross-cutting ways. Using data from 1990 to 2004 for 94 developing countries, we show that pre-electoral fiscal manipulation is more likely when international election monitors make direct election manipulation more difficult, and it is less likely when governments are subject to international economic scrutiny resulting from an IMF agreement. P re-electoral fiscal manipulation—spending more or taxing less prior to an election—is an important tool that governments may use to enhance their chances for reelection. 1 Recent studies document that it is employed most often in new democracies (Brender and Drazen 2005) and devel- oping countries (Shi and Svensson 2006). 2 Existing explanations for why incumbents in these countries engage in pre-electoral fiscal manipulation focus on domestic characteristics, and scholars have shown that pre-electoral fiscal manipulation is more likely the less consolidated the democracy (Gonzalez 2002), the less transparent the political system (Alt and Lassen 2006), the less independent the media (Brender 2003), the less aware the voters (Brender and Drazen 2005), and the poorer the country (Schuknecht 2000). Despite widespread recognition of the impact of the international environment on developing coun- tries’ fiscal policies (Mosley 2002; Wibbels 2006), scholars have not examined the effect of the interna- tional environment on pre-electoral fiscal manipu- lation among these countries. In this article, we explore how two potentially cross-cutting sources of international scrutiny influence governments’ deci- sions to engage in pre-electoral fiscal manipulation. Specifically, we argue that international scrutiny of the electoral process increases the likelihood of pre- electoral fiscal manipulation, while international scrutiny of the economy decreases the likelihood of pre-electoral fiscal manipulation. Politically, developing countries that wish to be considered democratic, as demonstrated through free and fair elections, are increasingly subject to scrutiny of their electoral process from international election monitors. Monitors focus primarily on documenting direct electoral fraud, and publicize information about election quality to domestic and international audiences. Negative reports frequently trigger nega- tive consequences. Elections declared fraudulent by reputable observers have been used to justify reductions in foreign aid, internationally supported post-election domestic uprising, economic sanctions targeted at the regime, suspension from international organizations, and the withholding of other benefits that would have otherwise been awarded following an internationally certified election (Bjornlund 2004; Bratton 1998). The Journal of Politics, Vol. 72, No. 3, July 2010, Pp. 690–704 doi:10.1017/S0022381610000101 Ó Southern Political Science Association, 2010 ISSN 0022-3816 1 An online appendix for this article is available at http://journals.cambridge.org/jop containing supplemental analyses. Data and supporting materials necessary to reproduce the numerical results in the paper are available at http://hyde.research.yale.edu/research. htm no later than the publication date. 2 See Kayser (2005) Franzese (2002), and Drazen (2001) for an overview of this literature. 690