This paper examines the political influences on government-owned banks in emerging markets, focusing on their lending behavior around election years. The study uses a cross-country, bank-level empirical approach to analyze the impact of elections on the lending activities of government-owned banks compared to private banks. Key findings include: 1. **Election-Related Lending Increase**: Government-owned banks increase their lending relative to private banks in election years. This effect is robust to controlling for macroeconomic and bank-specific factors. 2. **Robustness to Factors**: The increase in lending is significant even when controlling for country-specific macroeconomic factors and bank-specific characteristics such as capital ratio and asset size. 3. **Country-Specific Analysis**: The increase in lending is more pronounced in emerging markets than in developed economies. In emerging markets, government-owned banks increase their lending by about 11% of their total loan portfolio, or 0.5% of the median country's GDP per election per government-owned bank. 4. **Non-Election Years**: There is no evidence of a post-election increase in lending, suggesting that the election-year increase is not a reflection of changes in non-election years. 5. **Policy Implications**: The findings have implications for policy, particularly regarding the effectiveness of monetary and fiscal restrictions in preventing politicians from using government-owned banks for political purposes. The results also highlight the need for more comprehensive oversight and regulation of government-owned banks to mitigate potential distortions. The study provides the first cross-country, bank-level evidence of politically motivated lending at government-owned banks in emerging markets, contributing to the understanding of the political economy of financial institutions.This paper examines the political influences on government-owned banks in emerging markets, focusing on their lending behavior around election years. The study uses a cross-country, bank-level empirical approach to analyze the impact of elections on the lending activities of government-owned banks compared to private banks. Key findings include: 1. **Election-Related Lending Increase**: Government-owned banks increase their lending relative to private banks in election years. This effect is robust to controlling for macroeconomic and bank-specific factors. 2. **Robustness to Factors**: The increase in lending is significant even when controlling for country-specific macroeconomic factors and bank-specific characteristics such as capital ratio and asset size. 3. **Country-Specific Analysis**: The increase in lending is more pronounced in emerging markets than in developed economies. In emerging markets, government-owned banks increase their lending by about 11% of their total loan portfolio, or 0.5% of the median country's GDP per election per government-owned bank. 4. **Non-Election Years**: There is no evidence of a post-election increase in lending, suggesting that the election-year increase is not a reflection of changes in non-election years. 5. **Policy Implications**: The findings have implications for policy, particularly regarding the effectiveness of monetary and fiscal restrictions in preventing politicians from using government-owned banks for political purposes. The results also highlight the need for more comprehensive oversight and regulation of government-owned banks to mitigate potential distortions. The study provides the first cross-country, bank-level evidence of politically motivated lending at government-owned banks in emerging markets, contributing to the understanding of the political economy of financial institutions.