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The impact of democratic elections on taxation: Quasi-experimental evidence from subnational Indonesia

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  • Lewis, Blane D.

Abstract

I examine the impact of direct mayoral elections on taxation in Indonesia. I find that districts led by directly elected mayors tax less than districts with council appointed executives. Uniquely in the literature, I also determine that districts with directly elected mayors and, by implication, districts with council appointed heads both tax more than their counterparts with central government appointed executives.

Suggested Citation

  • Lewis, Blane D., 2022. "The impact of democratic elections on taxation: Quasi-experimental evidence from subnational Indonesia," Economics Letters, Elsevier, vol. 211(C).
    • Handle: RePEc:eee:ecolet:v:211:y:2022:i:c:s0165176522000015
    DOI: 10.1016/j.econlet.2022.110270
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    References listed on IDEAS

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    1. Jorge Martinez-Vazquez & Santiago Lago-Peñas & Agnese Sacchi, 2017. "The Impact Of Fiscal Decentralization: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 31(4), pages 1095-1129, September.
    2. Blane D. Lewis, 2020. "How do mayors get elected? The causal effects of pre-electoral coalitions on mayoral election outcomes in Indonesia," Local Government Studies, Taylor & Francis Journals, vol. 46(3), pages 394-413, May.
    3. Sjahrir, Bambang Suharnoko & Kis-Katos, Krisztina & Schulze, Günther G., 2013. "Political budget cycles in Indonesia at the district level," Economics Letters, Elsevier, vol. 120(2), pages 342-345.
    4. Stephen Coate & Brian Knight, 2011. "Government Form and Public Spending: Theory and Evidence from US Municipalities," American Economic Journal: Economic Policy, American Economic Association, vol. 3(3), pages 82-112, August.
    5. Sun, Liyang & Abraham, Sarah, 2021. "Estimating dynamic treatment effects in event studies with heterogeneous treatment effects," Journal of Econometrics, Elsevier, vol. 225(2), pages 175-199.
    6. Callaway, Brantly & Sant’Anna, Pedro H.C., 2021. "Difference-in-Differences with multiple time periods," Journal of Econometrics, Elsevier, vol. 225(2), pages 200-230.
    7. Blane Lewis, 2003. "Tax And Charge Creation By Regional Governments Under Fiscal Decentralisation: Estimates And Explanations," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 39(2), pages 177-192.
    8. Sant’Anna, Pedro H.C. & Zhao, Jun, 2020. "Doubly robust difference-in-differences estimators," Journal of Econometrics, Elsevier, vol. 219(1), pages 101-122.
    9. Florian Ade, 2014. "Do constitutions matter? Evidence from a natural experiment at the municipality level," Public Choice, Springer, vol. 160(3), pages 367-389, September.
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    More about this item

    Keywords

    Democratic elections; Local government; Taxation;
    All these keywords.

    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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