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Term limits for mayors and intergovernmental grants: Evidence from Italian cities

Chiara Dalle Nogare () and Björn Kauder

Regional Science and Urban Economics, 2017, vol. 64, issue C, 1-11

Abstract: We investigate how term limits for mayors influence central government transfers to municipalities. Estimates are based on a dataset of Italian cities over the 1998–2010 period. To credibly identify the influence of term limits, our estimations include mayor fixed effects. We also consider intra-term differences in intergovernmental grants. We provide evidence that electoral incentives distort rather than discipline incumbent mayors’ behavior because transfers are higher before an election with an eligible incumbent, in line with the political budget cycle literature. This evidence is also consistent with the idea that the allocation of intergovernmental grants is influenced by lobbying on the part of eligible local government officeholders, as in Borck and Owings (2003).

Keywords: Term limits; intergovernmental grants; local government; fiscal policy; electoral cycles (search for similar items in EconPapers)
JEL-codes: D72 H72 H77 R51 (search for similar items in EconPapers)
Date: 2017
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Working Paper: Term limits for mayors and intergovernmental grants: Evidence from Italian cities (2017)
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