Tax Limits and Local Democracy
Federico Revelli ()
Department of Economics and Statistics Cognetti de Martiis. Working Papers from University of Turin
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
New Economics Papers: this item is included in nep-cdm, nep-pbe, nep-pol and nep-ure
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Working Paper: Tax limits and local democracy (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:uto:dipeco:201336
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