Why Does Social Capital Increase Government Performance? The Role of Local Elections across Italian Municipalities

29 Pages Posted: 5 Jul 2017

See all articles by Alberto Batinti

Alberto Batinti

University of New Hampshire

Luca Andriani

Centre for Political Economy and Institutional Studies, Birkbeck University of London

Andrea Filippetti

Italian National Research Council (CNR-ISSIRFA); London School of Economics & Political Science (LSE); University of London - Birkbeck College

Date Written: April 07, 2017

Abstract

There is wide consensus that social capital increases government performance. However, the very mechanism underlying the relationship between social capital and well-performing governments remains unclear. In this paper we focus on the budgetary composition of local governments and find that the joint effect of larger social capital and higher quality in government’s spending improves the re-election chances of incumbent policy makers. By looking at 8,000 Italian municipalities over the period 2003-2012, we show that incumbent mayors who carry out a forward-looking and transparent fiscal agenda are more likely to be reelected where the level of local social capital is larger. In contexts with larger social capital, we obtain a non-trivial average effect of a 54% larger probability to be reelected when a more forward-looking agenda is in place. Thus, the good conduct of incumbent mayors is rewarded, but only in contexts with more social capital. Twin estimates considering a more transparent fiscal agenda are not significant but show the predicted sign and the comparable size of a 31% larger probability. Our evidence is robust when controlling for the political budget cycle, and provides ground for further exploration of the electoral mechanism as an important channel to explain the connection between social capital and good government performance.

Keywords: Local Re-Election; Social Capital; Selection of Politicians; Government Performance; Fiscal Federalism

Suggested Citation

Batinti, Alberto and Andriani, Luca and Filippetti, Andrea, Why Does Social Capital Increase Government Performance? The Role of Local Elections across Italian Municipalities (April 07, 2017). Available at SSRN: https://ssrn.com/abstract=2995833 or http://dx.doi.org/10.2139/ssrn.2995833

Alberto Batinti (Contact Author)

University of New Hampshire ( email )

15 College Road
Durham, NH 03824
United States

Luca Andriani

Centre for Political Economy and Institutional Studies, Birkbeck University of London ( email )

Malet Street
London, London WC1
United Kingdom

Andrea Filippetti

Italian National Research Council (CNR-ISSIRFA) ( email )

Via dei Taurini, 19
00185 Rome
Italy

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

University of London - Birkbeck College ( email )

Malet Street
London, WC1E 7HX
United Kingdom

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