Do bailouts buy votes? Evidence from a panel of Hessian municipalities

Thushyanthan Baskaran

MPRA Paper from University Library of Munich, Germany

Abstract: I study whether bailouts of local governments carry electoral benefits for state governments with a dataset covering 421 municipalities in the German state of Hesse over the period 1999-2011. I find that past bailouts have no economically significant effect on the municipality-level vote share of the parties that formed the state government in subsequent state elections. On the other hand, bailouts lead to vote increases for the ruling parties in subsequent local elections. On balance, these results suggest that electoral concerns are not the reason why central governments find it difficult to commit to a no-bailout policy.

Keywords: Subnational bailouts; state-level elections; local fiscal policy (search for similar items in EconPapers)
JEL-codes: D72 H30 H74 H77 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-cdm and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Journal Article: Do bailouts buy votes? Evidence from a panel of Hessian municipalities (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:48228

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