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Local government fiscal policy, social capital and electoral payoff: evidence across Italian municipalities

Batinti, Alberto, Andriani, Luca and Filippetti, Andrea (2019) Local government fiscal policy, social capital and electoral payoff: evidence across Italian municipalities. Kyklos, 72 (4). 503 - 526. ISSN 0023-5962

[img] Text (Local government fiscal policy) - Accepted Version
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Identification Number: 10.1111/kykl.12209

Abstract

Citizens’ attitudes and reactions to policymakers’ decisions depend on several factors, including informal institutions. The novelty of this paper is to use social capital as a moderator factor to shed light on the relationship between fiscal policies and electoral outcomes. We investigate this relationship using a sample of 6,000 Italian municipalities over the period 2003-2012 and use a Conditional Logit Matching model comparing incumbents to challengers’ characteristics within each election. We find that social capital increases the odds of the re-election of incumbent mayors who adopted a local fiscal policy more oriented towards capital investment (versus current expenditure) and towards property tax (versus income surcharge). This suggests that social capital encourages governmental functions and public policies improving long-term economic commitments, institutional transparency, and accountability. It also shows that decentralization works relatively better with social capital.

Item Type: Article
Official URL: https://onlinelibrary.wiley.com/journal/14676435
Additional Information: © 2019 John Wiley & Sons Ltd
Divisions: Geography & Environment
Subjects: H Social Sciences > HJ Public Finance
J Political Science > JS Local government Municipal government
Date Deposited: 11 Apr 2019 11:00
Last Modified: 29 May 2020 23:07
URI: http://eprints.lse.ac.uk/id/eprint/100438

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