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Term limits for mayors and intergovernmental grants: Evidence from Italian cities

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  • Dalle Nogare, Chiara
  • Kauder, Björn

Abstract

We investigate how term limits for mayors influence central government transfers to municipalities. Estimates are based on a dataset of Italian cities over the 1998–2010 period. To credibly identify the influence of term limits, our estimations include mayor fixed effects. We also consider intra-term differences in intergovernmental grants. We provide evidence that electoral incentives distort rather than discipline incumbent mayors’ behavior because transfers are higher before an election with an eligible incumbent, in line with the political budget cycle literature. This evidence is also consistent with the idea that the allocation of intergovernmental grants is influenced by lobbying on the part of eligible local government officeholders, as in Borck and Owings (2003).

Suggested Citation

  • Dalle Nogare, Chiara & Kauder, Björn, 2017. "Term limits for mayors and intergovernmental grants: Evidence from Italian cities," Regional Science and Urban Economics, Elsevier, vol. 64(C), pages 1-11.
    • Handle: RePEc:eee:regeco:v:64:y:2017:i:c:p:1-11
    DOI: 10.1016/j.regsciurbeco.2017.01.004
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    3. Björn Kauder & Manuela Krause & Niklas Potrafke, 2018. "Electoral cycles in MPs’ salaries: evidence from the German states," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 25(4), pages 981-1000, August.
    4. Ilya A. Vaskin, 2020. "Buying Loyalty Of Voters Or Local Elites? Political Alignment And Transfers To Provinces In Tutelary Regimes: The Case Of Iran," HSE Working papers WP BRP 73/PS/2020, National Research University Higher School of Economics.
    5. Manuela Krause, 2019. "Communal fees and election cycles: Evidence from German municipalities," ifo Working Paper Series 293, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    6. Steven Gordon, 2019. "The Returns to Lobbying: Evidence from Local Governments in the “Age of Earmarksâ€," Public Finance Review, , vol. 47(5), pages 893-924, September.
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    8. Yannick Bury & Lars P. Feld, 2024. "Do Local Elections Affect the Spending of Intergovernmental Transfers? Evidence from Germany’s Stimulus Package of 2009," CESifo Working Paper Series 11457, CESifo.
    9. Mauro Caselli & Andrea Fracasso & Silvio Traverso, 2021. "Globalization, robotization, and electoral outcomes: Evidence from spatial regressions for Italy," Journal of Regional Science, Wiley Blackwell, vol. 61(1), pages 86-111, January.
    10. Kauder, Björn & Potrafke, Niklas & Reischmann, Markus, 2016. "Do politicians reward core supporters? Evidence from a discretionary grant program," European Journal of Political Economy, Elsevier, vol. 45(C), pages 39-56.

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    More about this item

    Keywords

    Term limits; intergovernmental grants; local government; fiscal policy; electoral cycles;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies

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