Do Political Parties Matter? Evidence from U.S. Cities

38 Pages Posted: 24 Oct 2007 Last revised: 10 May 2012

See all articles by Fernando V. Ferreira

Fernando V. Ferreira

University of Pennsylvania - The Wharton School

Joseph Gyourko

University of Pennsylvania - Real Estate Department; National Bureau of Economic Research (NBER)

Date Written: October 2007

Abstract

We examine whether partisan political differences have important effects on policy outcomes at the local level using a new panel data set of mayoral elections in the United States. Applying a regression discontinuity design to deal with the endogeneity of the mayor's party, we find that party labels do not affect the size of government, the allocation of spending or crime rates, even though there is a large political advantage to incumbency in terms of the probability of winning the next election. The absence of a strong partisan impact on policy in American cities, which is in stark contrast to results at the state and federal levels of government, appears due to certain features of the urban environment associated with Tiebout sorting. In particular, there is a relatively high degree of household homogeneity at the local level that appears to provide the proper incentives for local politicians to be able to credibly commit to moderation and discourages strategic extremism.

Suggested Citation

Ferreira, Fernando V. and Gyourko, Joseph E., Do Political Parties Matter? Evidence from U.S. Cities (October 2007). NBER Working Paper No. w13535, Available at SSRN: https://ssrn.com/abstract=1024139

Fernando V. Ferreira

University of Pennsylvania - The Wharton School ( email )

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215-898-7181 (Phone)
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HOME PAGE: http://real.wharton.upenn.edu/~fferreir/

Joseph E. Gyourko (Contact Author)

University of Pennsylvania - Real Estate Department ( email )

Philadelphia, PA 19104-6330
United States
215-898-3003 (Phone)
215-573-2220 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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