Working Paper

Political Economy

Gianmarco Daniele, Benny Geys

2015/41: Exposing politician’s ties to criminal organizations: the effects of local government dissolutions on electoral outcomes in southern Italian municipalities

Since 1991, the Italian national government can dissolve municipal councils when infiltration by organized crime is suspected (Law 164/1991). We exploit variation over time and space in the application of this law to study voters’ responses to politicians’ publicly exposed ties to criminal organizations. Using a difference-in- differences approach, we find that public exposure of ties to organized crime significantly depresses turnout in local elections, and negatively impacts the electoral performance of incumbents and purely local political parties. The breach in the local political principal-agent relationship also translates into citizens’ reduced willingness to contribute to the financing of local public goods.