Not Welcome Anymore: The Effect of Electoral Incentives on the Reception of Refugees

Abstract

Do electoral incentives affect immigration policies? I study this question in the setting of Italian municipalities making decisions about the reception of refugees. The localized control of the reception policy, combined with the exogenous timing of policy decisions and staggered elections, enables me to study the effect of electoral incentives on the reception of refugees. Although municipalities receive fiscal grants for hosting refugees, I find that the probability of opening a reception centre is 24 per cent lower for municipalities in the final year of the electoral term (i.e. just before new elections), compared to municipalities in other years of the term. The results suggest that electoral incentives may induce politicians to make decisions that are potentially detrimental from an economic perspective.

Keywords: Migration, reception of refugees, electoral incentives, fiscal grants

JEL Classification: R23, J61, D72, C23