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Tax limits and local elections

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  • Federico Revelli

    (University of Torino)

Abstract

This paper exploits variation in tax limits across over 7000 Italian municipalities during the 2000s to investigate their impact on voter turnout and local election outcomes. The empirical analysis is based on a panel data estimator on about 14,000 municipal elections during the 2001–2010 decade and on a quasi-experimental approach focusing on the fiscal limitation treatment of municipalities (local income surcharge freeze) in the years 2001 and 2006, where the trajectory of local turnout in the concurrent general elections is used as the counterfactual. The evidence suggests that tax limits provoke: (a) a modest fall in voter turnout in mayoral elections; (b) a mild decrease in the number of mayoral candidates; (c) a sizeable widening of elected mayors’ win margins and some improvement in mayors’ valence proxies. The evidence is compatible with the hypothesis that the imposition of tax limits lowers the ideological stakes of local elections, favors party-line crossing, and promotes vote convergence based on the valence of candidates.

Suggested Citation

  • Federico Revelli, 2016. "Tax limits and local elections," Public Choice, Springer, vol. 166(1), pages 53-68, January.
    • Handle: RePEc:kap:pubcho:v:166:y:2016:i:1:d:10.1007_s11127-016-0312-0
    DOI: 10.1007/s11127-016-0312-0
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    Cited by:

    1. Federico Revelli & Roberto Zotti, 2019. "The sacred and the profane of budget cycles: evidence from Italian municipalities," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 26(6), pages 1446-1477, December.
    2. Revelli, Federico, 2019. "The electoral migration cycle," European Journal of Political Economy, Elsevier, vol. 59(C), pages 461-482.
    3. Susana Peralta & João Pereira dos Santos, 2020. "Who seeks reelection: local fiscal restraints and political selection," Public Choice, Springer, vol. 184(1), pages 105-134, July.
    4. Schib, Tobias & Stutzer, Alois, 2024. "What Contributes to an Attractive Local Political Office? Evidence from Municipal Council Elections in Switzerland," IZA Discussion Papers 17524, Institute of Labor Economics (IZA).
    5. Lo Prete, Anna & Revelli, Federico, 2017. "Costly voting, turnout, and candidate valence," Economics Letters, Elsevier, vol. 158(C), pages 10-13.

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    More about this item

    Keywords

    Local elections; Voter turnout; Tax limits;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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