Tax Limits and Local Democracy

IEB Working Paper N. 2013/029

47 Pages Posted: 16 Oct 2013

Date Written: June 13, 2013

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 limitations 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.

Keywords: Local elections, voter turnout, tax and expenditure limitations, fiscal decentralization

JEL Classification: D72, H77, C23

Suggested Citation

Revelli, Federico, Tax Limits and Local Democracy (June 13, 2013). IEB Working Paper N. 2013/029, Available at SSRN: https://ssrn.com/abstract=2340420 or http://dx.doi.org/10.2139/ssrn.2340420

Federico Revelli (Contact Author)

University of Turin ( email )

Via Po 53
Facolta di Scienze Politiche
10124 Torino
Italy

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
21
Abstract Views
258
PlumX Metrics