Tax limits and local democracy

Federico Revelli

No 2013/29, Working Papers from Institut d'Economia de Barcelona (IEB)

Abstract: Based on a theoretical model where state limits on local government policy elicit a move from private value (position issue) to common value (valence issue) voting, I exploit exogenous variation in tax limitation rules in over 7,000 Italian municipalities during the 2000s to show that fiscal restraints provoke a fall in voter turnout and number of mayor candidates, and a rise in elected mayors’ valence proxy and win margins. The evidence is compatible with the hypothesis of hierarchical tax limitations fading the ideological stakes of local elections and favoring valence-based party line crossing, thus questioning the influential accountability postulate of the fiscal decentralization lore.

Keywords: Local elections; voter turnout; tax and expenditure limitations; fiscal decentralization (search for similar items in EconPapers)
JEL-codes: C23 D72 H77 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Tax Limits and Local Democracy (2013)
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