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The Effects of Social Capital on Government Performance and Turnover: Theory and Evidence from Italian Municipalities

Ben Lockwood, Francesco Porcelli (), Michela Redoano, Emanuele Bracco (), Federica Liberini and Daniel Sgroi
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Ben Lockwood: University of Warwick
Michela Redoano: University of Warwic
Federica Liberini: University of Bath

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: This paper makes three contributions. First, it presents a theoretical analysis of how both the civic preference and information aspects of social capital impact on government performance and turnover, employing a political agency model with both moral hazard and adverse selection. Second, it presents novel measures of both local government performance and on social capital at the Italian municipality level, using administrative data and an online survey respectively. Third, empirical results show that higher social capital improves government performance, especially in the first term of office, but also increases turnover of incumbent mayors, as predicted by the theory. The voting rule predicted by the theory has the feature that the level effect of social capital on the incumbent vote share is negative, but the interaction between social capital and performance is positive. Our empirical results also support this prediction.

Keywords: Social Capital; Voting; Elections; Government Efficiency JEL codes: H41; H72; D72 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-pol, nep-soc and nep-ure
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