Tax Limits and Local Democracy

Federico Revelli

Department of Economics and Statistics Cognetti de Martiis. Working Papers from University of Turin

Abstract: Based on a theoretical model where state limits on local government policy elicit a move from private value (position issue) to common value (valence issue) voting, I exploit exogenous variation in tax limitation rules in over 7,000 Italian municipalities during the 2000s to show that fiscal restraints provoke a fall in voter turnout and number of mayor candidates, and a rise in elected mayors’ valence proxy and win margins. The evidence is compatible with the hypothesis of hierarchical tax imitations fading the ideological stakes of local elections and favoring valence-based party line crossing, thus questioning the influential accountability postulate of the fiscal decentralization lore

Pages: 42 pages
Date: 2013-07
New Economics Papers: this item is included in nep-cdm, nep-pbe, nep-pol and nep-ure
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Citations: View citations in EconPapers (5)

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Working Paper: Tax limits and local democracy (2013)
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