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Voting, taxes, and heterogeneous preferences: Evidence from Swedish local elections

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  • Eva Mörk
  • Mattias Nordin

Abstract

In this paper, we investigate whether voters' reactions to tax changes depend on their preferences for public spending, in order to increase our understanding of the relationship between accountability and the formation of public policy. Utilizing high‐quality survey data, we find that voters who, ex ante, prefer a small public sector punish incumbents who raise taxes, while voters who prefer a large public sector reward tax hikes. Our results indicate that Swedish voters do not necessarily consider tax hikes to be an indication of misbehaving incumbents and that public policy is formed as a result of competing interests between voters with different policy preferences, rather than only as a conflict between rent‐seeking politicians and voters.

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  • Eva Mörk & Mattias Nordin, 2020. "Voting, taxes, and heterogeneous preferences: Evidence from Swedish local elections," Economics and Politics, Wiley Blackwell, vol. 32(3), pages 356-380, November.
    • Handle: RePEc:bla:ecopol:v:32:y:2020:i:3:p:356-380
    DOI: 10.1111/ecpo.12148
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    2. Klarin, Jonas, 2019. "Term Length and Public Finances: The Case of U.S. Governors," Working Paper Series 2019:5, Uppsala University, Department of Economics.
    3. Kumar, Anil & Liang, Che-Yuan, 2020. "Estimating taxable income responses with elasticity heterogeneity," Journal of Public Economics, Elsevier, vol. 188(C).

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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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