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

Chiara Dalle Nogare and Björn Kauder

Munich Reprints in Economics from University of Munich, Department of Economics

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).

Date: 2017
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Citations: View citations in EconPapers (10)

Published in Regional Science and Urban Economics 64(2017): pp. 1-11

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Journal Article: Term limits for mayors and intergovernmental grants: Evidence from Italian cities (2017)
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