Separating the Accountability and Competence Effects of Mayors on Municipal Spending

Boetti Lorenzo (), Franzoni Federico (), Galmarini Umberto (), Massimiliano Piacenza and Gilberto Turati ()
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Boetti Lorenzo: HERMES (Higher Education and Research on Mobility Regulation and the Economics of Local Services), Collegio Carlo Alberto, Piazza Arbarello 8, 10122 Torino, Italy
Franzoni Federico: Department of Economics and Finance (DEF), Università Cattolica del Sacro Cuore, Largo A. Gemelli 1, 20123 Milano, Italy
Galmarini Umberto: Department of Law, Economics and Cultures (DiDEC), Università dell’Insubria, Via S. Abbondio 12, 22100 Como, Italy

The B.E. Journal of Economic Analysis & Policy, 2024, vol. 24, issue 2, 597-647

Abstract: The Italian legislation provides a two-term limits for mayors, but it allows term-limited mayors to pass on the torch to one of their deputies as candidates for mayorship. We exploit this feature of the electoral system to design a novel identification strategy for separating the effects of ‘accountability’ (the difference in performance between two politicians facing different incentives in terms of re-elections) and ‘competence’ (the difference in performance between two politicians with different experience in policy making). Using a panel of 1203 Italian municipalities, from 1998 to 2015, we find a significant role for competence but not for accountability in affecting municipal spending. Specifically, second-and-last-term mayors, and first-term mayors with previous experience as executive officers, spend less, on average, than inexperienced first-term mayors. We also discuss the policy implications of this finding.

Keywords: accountability; competence; term limits; Italian municipalities (search for similar items in EconPapers)
JEL-codes: D72 H72 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1515/bejeap-2023-0093

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