en

IEB

Universitat de Barcelona logotipo
Working Paper
Fiscal Federalism
Federico Revelli

2013/29 : Tax limits and local democracy

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.



Download PDF

This website uses cookies to ensure that you receive the best experience when navigating. If you continue without changing the settings, you accept its use in conformity with our cookies policy. More information