Does the Popularity of the Incumbent Mayor Matter for Investment Activity? Evidence From Polish Municipalities

Monika Banaszewska

Economics and Politics, 2026, vol. 38, issue 2, 357-377

Abstract: This paper investigates whether the intensity of the political budget cycle in investment expenditures depends on the incumbent mayor's popularity in the preceding elections. Using a panel of 2479 Polish municipalities over the period 2004–2020 and data from six municipal elections, the analysis employs fixed‐effects estimations to identify the relationship between electoral incentives and budget behavior. The results show that increases in overall investment expenditures during pre‐election and election years are negatively associated with the incumbent mayor's previous vote share. This effect also holds for specific categories of investment expenditures, particularly transport and communication as well as public utilities. The findings are robust across a range of sensitivity checks and suggest that incumbents with weaker prior electoral mandates engage more actively in pre‐electoral investment cycles.

Date: 2026
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https://doi.org/10.1111/ecpo.70027

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Persistent link: https://EconPapers.repec.org/RePEc:bla:ecopol:v:38:y:2026:i:2:p:357-377

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